Insolvency and Bankruptcy Board of India No. IBBI/PR/2018/33 26 th November, 2018 PRESS RELEASE IBBI invites Suggestions and Comments on Draft Specimen: a. Information Memorandum b. Evaluation Matrix c. Request for Resolution Plans, and d. Resolution Plan. The Insolvency and Bankruptcy Code, 2016 (Code) read with the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Regulations) envisage inter alia preparation and issue / submission of (a) Information Memorandum, (b) Evaluation Matrix, (c) Request for Resolution Plans, and (d) Resolution Plan. These documents form the basis for various decisions by the stakeholders and hence the outcome of a corporate insolvency resolution process depends on quality of these documents. 2. The Code read with the Regulations indicate the content and purpose of the aforesaid documents. Market has developed best practices about detailed content of these documents from the perspective of adequacy and relevance for stakeholders. It, however, requires considerable skill and expertise and due diligence to prepare these documents which are complete, correct, relevant and user friendly, while confirming to the requirements of the Code and Regulations and meeting the need and expectations of the stakeholders. 3. A few stakeholders have prepared draft specimen of the aforesaid documents (placed as Annexures). The IBBI intends to refine these documents, with inputs from stakeholders, and release them as specimen for guidance of the stakeholders. It invites suggestions and comments from stakeholders as under: Sl. No. Document Annexures Suggestions and Comments may be mailed to: 1 2 3 4 1. Draft Specimen of Information Memorandum along with a. Draft Specimen of Information Memorandum for a Corporate Debtor in Manufacturing Sector, and b. Draft Specimen of Information Memorandum for a Corporate Debtor in Power Sector. A A1 A2 [email protected]2. Draft Specimen of Evaluation Matrix B 3. Draft Specimen of Request for Resolution Plans C 4. Draft Specimen of Resolution Plan D 4. The suggestions and comments may be mailed at the email address as indicated in column 4 of the above table, latest by15 th December, 2018. In the subject line of the email, please state: “Comments on Information Memorandum (A, A1 and A2)/ Comments on Evaluation Matrix(B) / Comments on Request for Resolution Plans (C) / Comments on Resolution Plan (D). Sd/- (Methil Unnikrishnan) General Manager www.taxguru.in
230
Embed
· 2019. 1. 1. · Insolvency and Bankruptcy Board of India No. IBBI/PR/2018/33 26thNovember, 2018 PRESS RELEASE IBBI invites Suggestions and Comments on ... BTG Boiler Turbine Generator
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Insolvency and Bankruptcy Board of India
No. IBBI/PR/2018/33
26thNovember, 2018
PRESS RELEASE
IBBI invites Suggestions and Comments on Draft Specimen:
a. Information Memorandum
b. Evaluation Matrix
c. Request for Resolution Plans, and
d. Resolution Plan.
The Insolvency and Bankruptcy Code, 2016 (Code) read with the IBBI (Insolvency Resolution Process
for Corporate Persons) Regulations, 2016 (Regulations) envisage inter alia preparation and issue /
submission of (a) Information Memorandum, (b) Evaluation Matrix, (c) Request for Resolution Plans,
and (d) Resolution Plan. These documents form the basis for various decisions by the stakeholders and
hence the outcome of a corporate insolvency resolution process depends on quality of these documents.
2. The Code read with the Regulations indicate the content and purpose of the aforesaid documents.
Market has developed best practices about detailed content of these documents from the perspective of
adequacy and relevance for stakeholders. It, however, requires considerable skill and expertise and due
diligence to prepare these documents which are complete, correct, relevant and user friendly, while
confirming to the requirements of the Code and Regulations and meeting the need and expectations of
the stakeholders.
3. A few stakeholders have prepared draft specimen of the aforesaid documents (placed as Annexures).
The IBBI intends to refine these documents, with inputs from stakeholders, and release them as
specimen for guidance of the stakeholders. It invites suggestions and comments from stakeholders as
3. Draft Specimen of Request for Resolution Plans C
4. Draft Specimen of Resolution Plan D
4. The suggestions and comments may be mailed at the email address as indicated in column 4 of the
above table, latest by15th December, 2018. In the subject line of the email, please state: “Comments on
Information Memorandum (A, A1 and A2)/ Comments on Evaluation Matrix(B) / Comments on
Request for Resolution Plans (C) / Comments on Resolution Plan (D).
Sd/-
(Methil Unnikrishnan)
General Manager
www.taxguru.in
Page 1
Annexure-A
Specimen
Information Memorandum
Table of Contents
www.taxguru.in
Page 2
Abbreviations
ACQ Annual Contracted Quantity
B.Tech Bachelor of Technology
BoP Balance of Plant
BPTA Bulk Power Transmission Agreement
BTG Boiler Turbine Generator
CAGR Compound Annual Growth Rate
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
CoD Commercial Operation Date
Cr Crores
EPC Engineering, procurement and construction
FDI Foreign direct investment
FSA Fuel Supply Agreement
GCV Gross Calorific Value
INR Indian National Rupee
IPP Independent Power Producer
KCal Kilo Calories
Kg kilogram
Kms Kilometers
kV Kilovolt
kWh Kilowatt-hour
M.S. Masters of Science
M.Tech Master of Technology
Mn Million
MOC Ministry of Coal
MOD Merit order dispatch
MTPA Million Tons Per Annum
MW Mega Watt
O&M Operation and Maintenance
PLF Plant Load Factor
PPA Power Purchase Agreement
REC Rural Electrification Corporation Limited
ROM Run of Mine
Rs Rupees (Indian)
SERC State Electricity Regulatory Commission
SHR Station Heat Rate
St. Station
tn Tonne
TN Tamil Nadu
TPP Thermal Power Plant
UP Uttar Pradesh
WPI Wholesale Price Index
www.taxguru.in
Page 3
Disclaimer
This information memorandum is formulated by ABC (Name of Resolution Professional) in consultation with XYZ Ltd (Name of Professional Advisor, if any)which has been appointed as a professional advisor to the Resolution Professional (RP). The purpose of this document is to assist the recipient in decidingwhether they wish to proceed with a further investigation of the Company, and in putting forward resolution plan for the Company in accordance with theInsolvency and Bankruptcy Code, 2016 (hereinafter as “IBC” or “Code”) and the Regulations made thereunder, as amended from time to time. ThisInformation memorandum has been prepared in furtherance of Section 29 of the Code. The information memorandum contains specific information of thecorporate debtor including but not limited to the details as prescribed under sub-regulation 2 of Regulation 36 of the Insolvency and Bankruptcy Board ofIndia (Resolution process for Corporate Persons) Regulations, 2016 (hereinafter as “CIRP Regulations”).
This information memorandum and the information contained herein is not intended to form the basis of any investment decision by a prospectiveresolution applicants. Interested parties should carry out their own investigations and analysis of the Corporate Debtor and of the data referred to in thisInformation Memorandum and should consult their own advisers before submitting a resolution plan. Neither this document, nor anything containedherein, should form the basis of, or be relied upon in connection with any contract, agreement, undertaking, understanding or any commitment orinvestment decision whatsoever.
The information contained/disclosed in the information memorandum is as provided by the Corporate Debtor and the creditors of the Corporate Debtor. Norepresentation or warranty, express or implied, is given by the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional orXYZ Ltd. (Name of Professional Advisor) as to the accuracy, authenticity or completeness of the contents of this Memorandum or any other document orinformation supplied, or which may be supplied at any time or any opinions or projections expressed herein or therein, nor is any such party under anyobligation to update the Memorandum or correct any inaccuracies or omissions in it which may exist or become apparent. This Memorandum should not beconsidered as a recommendation by the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional or XYZ Ltd. (Name ofProfessional Advisor) to invest in the Corporate Debtor and each prospective applicant must make its own independent assessment of the merits orotherwise of investing in the corporate debtor.
This information memorandum contains the forecasts, projected financial information and other predictive statements that represent the ResolutionProfessionals and its Professional Advisors assumptions in light of information available in public domain, about circumstances and events that have not yettaken place. The said forecasts, projected financial information and other predictive statements are based on market/industry trends/predictions/estimatesand other factors. Accordingly, there can be no assurance or guarantee that the projected results will be attained. The projected results are not definitiveand are subject to change without notice. The future projections enclosed in this information memorandum involve risks and uncertainties, based on variousfactors and variables, which may cause actual performance to differ materially from any projections of future performance The Resolution Professional andits Professional Advisors at no time guarantees the accuracy/authenticity of the future projections. In particular, but without prejudice to the generality ofthe foregoing, no representation or warranty whatsoever is given in relation to the reasonableness or achievability of the projections contained in thisInformation Memorandum or in relation to the bases and assumptions underlying such projections and you must satisfy yourself in relation to thereasonableness, achievability and accuracy thereof. The recipient acknowledges that it will be solely responsible for its own assessment of the marketprojections and future prospects/performance of the corporate debtor
www.taxguru.in
Page 4
Disclaimer Cont.
Memorandum and the information contained therein is confidential and subject to the undertaking executed between the corporate debtor and therecipient in pursuance of Section 29 (2) of the Code. The recipient by way of the undertaking, unconditionally acknowledges to undertake to (a) comply withthe provisions of the law for the time being in force relating to confidentiality and insider trading (b) protect the intellectual property of the corporatedebtor it may have access to and (c) is statutorily obligated not to share the information memorandum or its contents with third parties unless (a) and (b)above have been complied with. The recipient further also acknowledges that the information contained in the information memorandum shall not be usedto cause undue gain or undue loss to itself or to any other persons and that the recipient shall comply with the requirements under Section 29(2) of theCode.
No responsibility or liability is accepted for any loss or damage arising whatsoever that you may suffer as a result of this Information memorandum or theinformation contained herein and any and all responsibility and liability is expressly disclaimed by the Resolution Professional and its Professional Advisorand its respective partners, directors, officers, affiliates, employees, advisors or agents.
Should this Information memorandum (through the act or default of the recipient) reach other persons without the resolution professional’s writtenconsent, the recipient shall indemnify the resolution professional and its professional advisor including its respective partners, directors, officers, affiliates,employees, advisors or agents against any loss or damage or other liabilities (including all costs), which they may suffer as a result.
By accepting a copy of this information memorandum, the recipient is deemed to have acknowledged and accepted that the terms and conditions of thedisclaimer notice and that it formed an integral/material part of this information memorandum. The recipient further is deemed to have unconditionallyacknowledged that the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional or XYZ Ltd. (Name of Professional Advisor)do not accept any liability for any and all information contained in this information memorandum. The recipient is deemed to have acknowledged that theinformation contained in the information memorandum shall not be utilised/used for any other purpose other than for the preparation of the ResolutionPlan as defined in the Code.
The information memorandum and the information contained herein may not be inclusive or contain all information which the recipient considers material.While the Resolution Professional shall endeavour to furnish further relevant information/details/ clarifications, the resolution professional is under noobligation to provide the recipient with any further relevant information/details/clarifications. In the event any additional information/clarifications are soprovided they shall be unconditionally subject to this disclaimer notice irrespective of whether it has been specifically provided for or not.
This information memorandum and the information contained herein should not be printed, reproduced, transmitted, sold, distributed, or published by therecipient without prior written approval of the Resolution Professional. The recipient further acknowledges to return and /or destroy this informationmemorandum at the written request of the resolution professional. The resolution professional shall act as the primary point of contact for the recipientsand any and all correspondences/clarifications should only be addressed to the resolution professional. This Information memorandum is issued by theresolution professional of the corporate debtor without incurring any liability/commitment on the part of itself or the professional advisor (including but notlimited to the professional advisors respective partners, directors, officers, affiliates, employees, advisors or agents) or the corporate debtor or any of itsofficers, employees or its agents
www.taxguru.in
Page 5
Contact Details:
For any further enquiries, please contact:
[Name]Resolution ProfessionalName of Corporate DebtorsTel: MobileEmail
www.taxguru.in
Page 6
Contents
Part A Statutory Information Memorandum under IBC
Part B Business Transaction Information Memorandum
www.taxguru.in
Page 7
Model Information MemorandumTable of Contents
Part A: Statutory Information Memorandum
1. Related Sections and Regulations
2. Contents as given in Regulation 36
3. Description of Assets & Liabilities and Financial Statements (Regulation 36(2)(a),(b) & (c))
4. List of Creditors (Financial, Operational, Employees and Others) including the names of creditors, the amounts claimed bythem, the amount of their claims admitted and the security interest, if any, in respect of such claims (Regulation 36(2)(d))
5. Dues to/from Related parties (Regulation 36(2)(e))
6. Guarantor Details (Regulation36(2)(f))
7. Members or partners having- 1% or more stake (Regulation36(2)(g))
8. Details of all material litigation and an ongoing investigation (Regulation36(2)(h))
9. No. of Workers & Employees and their dues (Regulation36(2)(i))
Part B: Transaction Information Memorandum
10. Executive Summary, Key Investment Highlights and Indicative Project Timelines
11. Company Overview
2.1 Corporate Debtor Profile
2.2 Business Evolution (Timeline)
2.3 Project Details
2.4 Current Scenario, Snapshot of Financial Performance and Interim Finance
2.5 Capital Structure of Corporate Debtor
2.6 Shareholding Pattern of Corporate Debtor
www.taxguru.in
Page 8
Model Information MemorandumTable of Contents
2.7 Financial & Operational Claims
2.8 Details of Preferential/Undervalued/Extortionate/Fraudulent Transactions
2.9 Facilities and Capability
2.10 Division Overview, Customer Overview and Summary of Contracts/Orders
2.11 Capex Requirement
2.12 Organisation Structure
2.13 Board of Directors & Key Management
2.14 Details of Statutory Approvals and Compliances
2.15 Investment Overview
3. Industry Overview
3.1 Snapshot
3.2 Sector Fundamentals
3.3 Key Growth Drivers
3.4 Competitor Analysis
3.5 Key Trends & Outlook
4. Projected Business Plan
4.1 Future Growth Strategy
4.2 Assumptions
4.3 Profit & Loss for the Forecast Period
4.4 Company level EBITDA analysis over the Forecast Period
This information memorandum is formulated by ABC (Name of Resolution Professional) in consultation with XYZ Ltd (Name of Professional Advisor, if any)which has been appointed as a professional advisor to the Resolution Professional (RP). The purpose of this document is to assist the recipient in decidingwhether they wish to proceed with a further investigation of the Company, and in putting forward resolution plan for the Company in accordance with theInsolvency and Bankruptcy Code, 2016 (hereinafter as “IBC” or “Code”) and the Regulations made thereunder, as amended from time to time. ThisInformation memorandum has been prepared in furtherance of Section 29 of the Code. The information memorandum contains specific information of thecorporate debtor including but not limited to the details as prescribed under sub-regulation 2 of Regulation 36 of the Insolvency and Bankruptcy Board ofIndia (Resolution process for Corporate Persons) Regulations, 2016 (hereinafter as “CIRP Regulations”).
This information memorandum and the information contained herein is not intended to form the basis of any investment decision by a prospectiveresolution applicants. Interested parties should carry out their own investigations and analysis of the Corporate Debtor and of the data referred to in thisInformation Memorandum and should consult their own advisers before submitting a resolution plan. Neither this document, nor anything containedherein, should form the basis of, or be relied upon in connection with any contract, agreement, undertaking, understanding or any commitment orinvestment decision whatsoever.
The information contained/disclosed in the information memorandum is as provided by the Corporate Debtor and the creditors of the Corporate Debtor. Norepresentation or warranty, express or implied, is given by the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional orXYZ Ltd. (Name of Professional Advisor) as to the accuracy, authenticity or completeness of the contents of this Memorandum or any other document orinformation supplied, or which may be supplied at any time or any opinions or projections expressed herein or therein, nor is any such party under anyobligation to update the Memorandum or correct any inaccuracies or omissions in it which may exist or become apparent. This Memorandum should not beconsidered as a recommendation by the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional or XYZ Ltd. (Name ofProfessional Advisor) to invest in the Corporate Debtor and each prospective applicant must make its own independent assessment of the merits orotherwise of investing in the corporate debtor.
This information memorandum contains the forecasts, projected financial information and other predictive statements that represent the ResolutionProfessionals and its Professional Advisors assumptions in light of information available in public domain, about circumstances and events that have not yettaken place. The said forecasts, projected financial information and other predictive statements are based on market/industry trends/predictions/estimatesand other factors. Accordingly, there can be no assurance or guarantee that the projected results will be attained. The projected results are not definitiveand are subject to change without notice. The future projections enclosed in this information memorandum involve risks and uncertainties, based on variousfactors and variables, which may cause actual performance to differ materially from any projections of future performance The Resolution Professional andits Professional Advisors at no time guarantees the accuracy/authenticity of the future projections. In particular, but without prejudice to the generality ofthe foregoing, no representation or warranty whatsoever is given in relation to the reasonableness or achievability of the projections contained in thisInformation Memorandum or in relation to the bases and assumptions underlying such projections and you must satisfy yourself in relation to thereasonableness, achievability and accuracy thereof. The recipient acknowledges that it will be solely responsible for its own assessment of the marketprojections and future prospects/performance of the corporate debtor
www.taxguru.in
Page 4
Disclaimer Cont.
Memorandum and the information contained therein is confidential and subject to the undertaking executed between the corporate debtor and therecipient in pursuance of Section 29 (2) of the Code. The recipient by way of the undertaking, unconditionally acknowledges to undertake to (a) comply withthe provisions of the law for the time being in force relating to confidentiality and insider trading (b) protect the intellectual property of the corporatedebtor it may have access to and (c) is statutorily obligated not to share the information memorandum or its contents with third parties unless (a) and (b)above have been complied with. The recipient further also acknowledges that the information contained in the information memorandum shall not be usedto cause undue gain or undue loss to itself or to any other persons and that the recipient shall comply with the requirements under Section 29(2) of theCode.
No responsibility or liability is accepted for any loss or damage arising whatsoever that you may suffer as a result of this Information memorandum or theinformation contained herein and any and all responsibility and liability is expressly disclaimed by the Resolution Professional and its Professional Advisorand its respective partners, directors, officers, affiliates, employees, advisors or agents.
Should this Information memorandum (through the act or default of the recipient) reach other persons without the resolution professional’s writtenconsent, the recipient shall indemnify the resolution professional and its professional advisor including its respective partners, directors, officers, affiliates,employees, advisors or agents against any loss or damage or other liabilities (including all costs), which they may suffer as a result.
By accepting a copy of this information memorandum, the recipient is deemed to have acknowledged and accepted that the terms and conditions of thedisclaimer notice and that it formed an integral/material part of this information memorandum. The recipient further is deemed to have unconditionallyacknowledged that the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional or XYZ Ltd. (Name of Professional Advisor)do not accept any liability for any and all information contained in this information memorandum. The recipient is deemed to have acknowledged that theinformation contained in the information memorandum shall not be utilised/used for any other purpose other than for the preparation of the ResolutionPlan as defined in the Code.
The information memorandum and the information contained herein may not be inclusive or contain all information which the recipient considers material.While the Resolution Professional shall endeavour to furnish further relevant information/details/ clarifications, the resolution professional is under noobligation to provide the recipient with any further relevant information/details/clarifications. In the event any additional information/clarifications are soprovided they shall be unconditionally subject to this disclaimer notice irrespective of whether it has been specifically provided for or not.
This information memorandum and the information contained herein should not be printed, reproduced, transmitted, sold, distributed, or published by therecipient without prior written approval of the Resolution Professional. The recipient further acknowledges to return and /or destroy this informationmemorandum at the written request of the resolution professional. The resolution professional shall act as the primary point of contact for the recipientsand any and all correspondences/clarifications should only be addressed to the resolution professional. This Information memorandum is issued by theresolution professional of the corporate debtor without incurring any liability/commitment on the part of itself or the professional advisor (including but notlimited to the professional advisors respective partners, directors, officers, affiliates, employees, advisors or agents) or the corporate debtor or any of itsofficers, employees or its agents
www.taxguru.in
Page 5
Contact Details:
For any further enquiries, please contact:
[Name]Resolution ProfessionalName of Corporate DebtorsTel: MobileEmail
www.taxguru.in
Page 6
Contents
Part A Statutory Information Memorandum under IBC
Part B Business Transaction Information Memorandum
www.taxguru.in
Page 7
Part A
Statutory Information Memorandum (Statutory IM)
www.taxguru.in
Page 8
Model Information MemorandumTable of Contents
Statutory Information Memorandum
1. Related Sections and Regulations
2. Contents as given in Regulation 36
3. Description of Assets & Liabilities and Financial Statements (Regulation 36(2)(a),(b) & (c))
4. List of Creditors (Financial, Operational, Employees & Others) (Regulation 36(2)(d))
5. Dues to/from Related parties (Regulation 36(2)(e))
6. Guarantor Details (Regulation36(2)(f))
7. Members or partners having- 1% or more stake (Regulation36(2)(g))
8. Details of all material litigation and an ongoing investigation (Regulation36(2)(h))
9. No of Workers & Employees and their dues (Regulation36(2)(i))
► Table 5 : Details of members / partners holding at least one per cent stake………………………………………12
► Table 6 : Material Litigation..……………………………………………………………………………………………………………..13
► Table 7 : Workers & Employees and their dues………………………………………………………………………………….14
Index of Tableswww.taxguru.in
Page 10
1. Relevant Sections and Regulations
Information Memorandum (Statutory IM) is a memorandum prepared by resolutionprofessional under sub-section (1) of section 29.
Provides that the resolution professional shall prepare an information memorandum in suchform and manner containing such relevant information as may be specified by the Board forformulating a resolution plan.
The resolution professional shall provide to the resolution applicant access to all relevantinformation in physical and electronic form, provided such resolution applicant undertakes—
(a) to comply with provisions of law for the time being in force relating to confidentialityand insider trading;
(b) to protect any intellectual property of the corporate debtor it may have access to; and
(c) not to share relevant information with third parties unless clauses (a) and (b) of thissub-section are complied with.
Explanation.—For the purposes of this section, “relevant information” means theinformation required by the resolution applicant to make the resolution plan for thecorporate debtor, which shall include the financial position of the corporate debtor, allinformation related to disputes by or against the corporate debtor and any other matterpertaining to the corporate debtor as may be specified.
Provides for the contents of the Statutory IM and the manner in which it will be submittedto each member of the CoC and any potential resolution applicant.
Section 5(10)
Section 29(1)
Section 29(2)
Regulation 36 of IBBI (IRPfor Corporate Persons)Regulations, 2016
www.taxguru.in
Page 11
2. Contents of Statutory IMRegulation 36 of IBBI (IRP for Corporate Persons) Regulations, 2016
S.No. Regulation Particulars
1 36(2)(a) Assets and Liabilities with such description, as on the insolvency commencement date, as are generally necessary for ascertaining their values.
2 36(2)(b) & 36(2)(c) The latest annual financial statements and audited financial statements of the corporate debtor for the last two financial years and provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application
3 36(2)(d) A list of Creditors containing the names of creditors, the amounts claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims
4 36(2)(e) Particulars of a debt due from or to the corporate debtor with respect to related parties
5 36(2)(f) Details of guarantees that have been given in relation to the debts of the corporate debtor by other persons, specifying which of the guarantors is a related party
6 36(2)(g) The names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake.
7 36(2)(h) Details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities.
8 36(2)(i) The number of workers and employees and liabilities of the corporate debtor towards them.
www.taxguru.in
Page 12
► A member of the committee may request the resolution professional for further information of the naturedescribed in this Regulation and the resolution professional shall provide such information to all members withinreasonable time if such information has a bearing on the resolution plan.
► The interim resolution professional or the resolution professional, as the case may be, shall share the informationmemorandum after receiving an undertaking from a member of the committee or a potential resolution applicantto the effect that such member or resolution applicant shall maintain confidentiality of the information and shallnot use such information to cause an undue gain or undue loss to itself or any other person and comply with therequirements under section 29(2).
2. Contents of Statutory IMRegulation 36 of IBBI (IRP for Corporate Persons) Regulations, 2016
www.taxguru.in
Page 13
1. Assets and Liabilities with such description, as on the insolvency commencement date, as are generally necessary for ascertaining their values.
2. ‘Description’ includes the details such as date of acquisition, cost of acquisition, remaining useful life, identification number, depreciation charged, book value, and any other relevant details.
3. The latest annual financial statements and audited financial statements of the corporate debtor for the last two financial years.
4. Provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application. Generally, provisional financials are made on the date of commencement of the Corporate Insolvency Resolution Process (CIRP).
Table-1
3. Assets & Liabilities and Financial Statements
Particulars Amount
Assets
Fixed Assets XXX
CWIP XXX
Investments (net of provisions) XXX
Loans and Advances XXX
Tax Assets XXX
Inventory XXX
Debtors XXX
Cash and Bank balances XXX
Investment in Mutual Funds XXX
Total Assets XXX
Liabilities
Financial creditors XXX
Operational Creditors XXX
Provisions XXX
Net Worth XXX
Total Liabilities XXX
Source: Financials of corporate debtor as on CIRP date
www.taxguru.in
Page 14
Financial Creditors: All financial creditors have to file their claims in Form C in the prescribed format, after which the Resolution Professional will verify and admit the claims to the extent they have been verified, form the CoC and include the claims of the financial creditors in the IM. All financial creditors have voting rights which is based on the proportion of the financial debt owed to such financial creditor in relation to the financial debt owed by the corporate debtor.Operational Creditors: All operational creditors have to file their claims in Form B in the prescribed format, after which the Resolution Professional will verify and admit the claims of the operational creditors to the extent they have been verified Operational creditors have no voting rights.Employee Claims & Other Claims are filed in Form D & Form E respectively, then they are verified and admitted.
4. List of Creditors- names of creditors, the amounts claimed by them, the amount of their claims admitted and the security interest
Financial, Operational, Employees & Others
Creditor names FacilityAmount of claims
submitted Amount admitted Voting right
Financial creditors XXX XXX 100%A Secured Term Loan XXX XXX 50%B Working Capital Loan XXX XXX 20%C Term Loan XXX XXX 30%
Creditor names FacilityAmount of claims
submitted Amount admitted Voting right
Operational Creditors XXX XXX NAX NA XXX XXX NAY NA XXX XXX NAZ NA XXX XXX NA
Table-2
Source: Data from Corporate Debtor/ Management Discussion/ Financials
www.taxguru.in
Page 15
5. Dues to/from Related Party
Definition of related party in relation to a Corporate Debtor is much wider in scope as compared to the Companies Act, 2013.
It has been defined in section 5(24) of IBC, 2016.
As per Regulation 36(2)(e), particulars of a debt due from or to the corporate debtor with respect to related parties are to be stated in the Statutory IM.
Sample Format
Debt payable to/due from related parties
Name of the party Trade receivables Trade payables Loans/AdvancesAny other
arrangementsNet receivable/
(payable)To/due from related parties:
XXX XXX XXX XXX XXX XXXXXX XXX XXX XXX XXX XXX
Total XXX XXX XXX XXX XXX
Table-3
Source: Data from Corporate Debtor/ Management Discussion/ Financials
www.taxguru.in
Page 16
As per Regulation 36(2)(f), details of guarantees that have been given in relation to the debts of the corporate debtor by otherpersons, specifying which of the guarantors is a related party.
Example: Corporate Guarantee or Personal Guarantee given in relation to the debts by any related party of the corporate debtor
6. Guarantor Details
Sample FormatGuarantees given Designation Facility
Personal guarantees of:XXX XXX XXX
Corporate guarantees of:XXX XXX XXX
Table-4
Source: Security Creation documents along with sanction letter/ Register of Charges created
www.taxguru.in
Page 17
As per Regulation 36(2)(g) , the names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake have to be provided in the Statutory IM
Sample Format
Name of the shareholder AddressNature of
ShareholderNo. of fully paid up equity
shares held
Shareholding as a % of total no. of
shares
Promoter GroupXXX XXX Promoter XXX XXX
Non Promoter GroupXXX XXX Non Promoter XXX XXX
Table-5
Source: Annual Report or Financials/ Register of Members
7. Details of Members/Partners Holding at least 1% Stakewww.taxguru.in
Page 18
As per Regulation 36(2)(h), Details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities have to be provided.
8. Material Litigations
Proceedings init iated by Court / Authority Related Law/ Regulat ion Part ies to the lit igat ion Part iculars of case
Not ice received for
amount
Amount Shown as
Cont ingent
Liabilit y Lawyer Involved
Labour Related cases
XXX XXX XXX XXX XXX XXX XXX XXX
Direct & Indirect Taxes Related cases
XXX XXX XXX XXX XXX XXX XXX XXX
Other cases
XXX XXX XXX XXX XXX XXX XXX XXX
Sample FormatTable-6
Source: Annual Report or Financials/ Management discussions
www.taxguru.in
Page 19
As per Regulation 36(2)(i), the number of workers and employees and liabilities of the corporate debtor towards them have to be provided.
9. Number of Workers and Employees and their Dues
Number of Employees and amount due to employees as on CIRP Commencement date
Particulars No. of Employees Balance outstanding as at CIRP Commencement Date
Number of Employees XXX
Number of Workers - Regular XXX
Number of Workers - Casual XXX
Wages & Salary including provision XXX
LTA and Medical Payable XXX
Reimbursements XXX
Provident Fund XXX
ESI XXX
Staff expenses unpaid XXX
Full and Final Settlement payable XXX
Any other XXX
Total XXX XXX
Sample Format
Table-7
Source: Management Discussions/ Data from Corporate Debtor
www.taxguru.in
Page 20
PART-Brt B –
Business Transaction-For a Corporate Debtor in
Manufacturing Sector
www.taxguru.in
Page 21
Model Information MemorandumTable of Contents
1. Executive Summary, Key Investment Highlights and Indicative Project Timelines
2. Company Overview
2.1 Corporate Debtor Profile
2.2 Business Evolution
2.3 Current Scenario, Snapshot of Financial Performance and Interim Finance
2.4 Capital Structure of Corporate Debtor
2.5 Shareholding Pattern of Corporate Debtor
2.6 Financial and Operational Claims
2.7 Division and Customer Overview and Key Contracts
2.8 Supply Chain Infrastructure
2.9 Facilities and Capability
2.10 Details of Manufacturing Facilities & Additional Capex Requirement
2.11 Organisation Structure
2.12 Board of Director and Key Management
2.13 Details of Statutory Approvals and Compliances
2.14 Investment Overview
3. Industry Overview
3.1 Snapshot
3.2 Sector Fundamentals
3.3 Key Growth Drivers
3.4 Competitor Analysis
Transaction Information Memorandum
www.taxguru.in
Page 22
4. Projected Business Plan
4.1 Future Growth Strategy
4.2 Assumptions
4.3 Profit & Loss for the Forecast Period
4.4 Company level EBITDA analysis over the Forecast Period
➢ Chart 10 : Production Capacity………………………………………………………………………………………………………... 36
www.taxguru.in
Page 25
1. Executive Summary
Company Overview
What ABC Ltdoffers?
► ABC Ltd. (“the Company”) is a leading []
► Has a comprehensive product portfolio of []
► Recently commenced providing turnkey services such as []
► Operates X state of art Manufacturing facilities in ABC/DEF/GHI
► Equipped with XXXXXXX
► Has deep-rooted and long-standing customer relationships with one of the market leaders in the Indian industry and
other prominent domestic and international brands
► Owned and run by professional management
► CIRP background
The Transaction
► Opportunity to increase the production capacity
► Operational state-of-the-art manufacturing plant equipped with backward integrated facilities
► Established platform for a strategic partner to enter/ expand its operations in the high growth Indian [relevant industry]
market, resulting in an immediate top-line boost
► [mention opportunity here]
www.taxguru.in
Page 26
1. Key Investment Highlights
Comprehensive product portfolio1
State-of-the-art manufacturing facilities with end-to-end backward integrated operations
2
Professional management team and corporate governance standards benchmarked to best industry practices
3
Operating in high growth industry4
Diverse Mix of Customers5
www.taxguru.in
Page 27
1. Indicative Project Timelines
✓ Communication strategy
✓ Day 0 plan✓ Risk identifications
& mitigation ✓ Application
formalities
File application to NCLT
✓ Public Announcement
✓ Take control of the assets
✓ Roll out new org. chart
✓ Prepare an IM✓ Meetings with key
suppliers & customers
✓ Constitute Committee of all Creditors
✓ Agree a plan with customers
✓ Funding requirement and identify potential investor
Approval of the resolution plan by CoC & NCLT
✓ Sale of any non core assets ✓ Update list of claims from
creditors✓ Diligence / Meeting with
potential resolution applicant
✓ Optimize cash and cut cost
✓ Negotiate with different creditors
Planning 0-30 days 31-60 days 61-120 days 121-150 days 151-180 days
Project & crisis management
Negotiate plan with creditors
Cash flow management
Collect and validate claimsCompliance with IBC rules
Stakeholder management
✓ Review all resolution plan received before presenting to CoC
www.taxguru.in
Page 28
Company Overview
www.taxguru.in
Page 29
2. Company Overview
2.1 Corporate Debtor Profile
Particulars Year-I Year-II Year-III
Revenue
Revenue from operations XXX XXX XXX
Other Income XXX XXX XXX
Total Revenue XXX XXX XXX
Expenses:
Cost of Materials Consumed XXX XXX XXX
Changes in inventories of finished goods, work-in-
progress and Stock-in-Trade XXX XXX XXX
Employee benefit expense XXX XXX XXX
Other Expenses XXX XXX XXX
EBITDA XXX XXX XXX
EBITDA Margin XXX XXX XXX
Depreciation and Amortization of Expenses XXX XXX XXX
Finance costs XXX XXX XXX
PBT XXX XXX XXX
Tax XXX XXX XXX
PAT XXX XXX XXX
PAT Margin XXX XXX XXX
• A brief observation on a key trend or outlook can be highlighted here
• Additionally, Financial data can also be summarised in the form of charts and Revenue-EBITDA relation, Revenue-PAT Relation and other important data can also be presented.
❑ Brief overview of the Company along with particulars suchas:
❑ Overview of operations,
❑ Key Management and board,
❑ Overview of facilities,
❑ Key Customers
❑ Registered Address, date of Incorporation, CIN number, etc.
❑ Number of employees
Overview of the Corporate Debtor Financial Summary
Segment overview
Sales by Geography Sales by Segment
Table 1Source: Company Annual Report/ Historical Financials
Chart 1Source: Company Annual Report/ Company Website/ Management Discussions
Chart 2
www.taxguru.in
Page 30
2.2 Business Evolution
1975-2000
2005-082000-05
2008-11
2011-present
► Inception- XXX was Incorporated in June, 1975
► []
► []
► []
► []
Evolved over the last 4 decades to become one of the frontline players in the [xxxx] industry in India
Going forward, the Company has opportunity
to _________and aim at higher __________
www.taxguru.in
Page 31
2.3 Current Scenario
► Manufacturing plants are sitting idle due to higher cost of manufacturing per unit as compared to competitors utilising theeconomies of scale .
► Implementation of a government policy or regulation which is unfavourable for the industry.
► Liquidation or Hostile Takeovers by capital rich companies to create synergy benefits and capture market share.
► Slow growth in the economy/industry due to recession due to which companies are facing liquidity issues.
► XXX
► Lack of maintenance of machines leading to highercost in the form of internal rejections, breakdowncost, idle labour, etc.
► Poor controls over quality check or lack of a properquality check policy which leads to increased costin the form of higher external rejections andfreight cost.
► Loss in share of business because of not deliveringorders in time and poor quality of finishedproducts.
► XXX
► XXX
Technical Issues
► Lower EBITDA and negative free cash due to underutilisation of capacity. Hence, company is not ableto currently service its full interest and debtobligations.
► Loss of sales and share of business due toapprehension amongst the customers caused dueto failure to perform and CIRP rumours.
► Lack of orders resulting in non recovery of Fixedcost. Hence, negative cash flows.
► XXX
► XXX
► XXX
Financial Issues
Macroeconomic Factors
www.taxguru.in
Page 32
Financial Summary
1. The consistent increase in revenue in the last 2years is in line with the increasing trend as seen inthe industry.
2. Low EBITDA margin along with calculated InterestCoverage Ratio and Debt Service Coverage Ratioshows the difficulty in servicing the finance costand principal instalments.
3. Increasing inventory and trade receivables highlightsworking capital being blocked and hence, theliquidity problems faced by ABC Ltd.
4. XXXXXX
5. XXXXXX
6. XXXXXX
Income Statement Summary
Particulars FY 1 FY -1 FY -2
Revenue from Operations
Other Income
Total Expenses
EBITDA
Depreciation
EBIT
Interest expense
EBT
PAT
ance sheet as on XX/XX/XXXX
Particulars FY 1 FY -1 FY -2
Equity
- Net Worth
Non- Current Liability
- Long term loan
- Others
Current Liability
- Sundry creditors
- Others
Total Equity and Liability
Assets
Non-Current Assets
- Investments
- Others
Current assets
- Debtors
- Cash
Total Assets
2.3 Snapshot of Financial Performance
Table 2
Source: Company Annual Report/ Historical Financials
www.taxguru.in
Page 33
2.3 Interim Finance
Current Status
• Advances received from key customers to keep thebusiness afloat and maintain continuity ofsupplies; to be repaid on offset against sales basis
• Delay in salaries & wages resulting in low moraleacross the company; inability to retain/deployworkers at the required level impactingproduction and sales
• At current levels of production, cash gap projectedto hit INR 10 Cr by April, resulting in totalshutdown of, unless Interim Finance is raised
Projected Cash-flow
Particulars Mar Apr May Jun
Projected inflows 38 39 34 34
Projected outflows 43 47* 43 43
Net Cash after opening
adjustments(2) (8) (10) (10)
Cumulative cash gap (2) (10) (20) (30)
Estimated Interim Finance Required: INR XX Cr
• Accumulation of month on month operatinglosses on account of operating below break evenlevels could lead to closure
• Low probability of achieving good bids/ resolutionplans on account of sub-optimal operations andabsence of confidence from customers
• XXXX• XXXX
• Amount of Interim Finance : INR XXCr.• Period : CIR period• Upfront fee : 2% on the disbursed amount• Rate of Interest :XX6% P.A (Interest payable monthly)• Repayment : No repayment during CIR period
Challenges without Interim Finance
Indicative Term Sheet
www.taxguru.in
Page 34
Capital Structure:
Capital Structure of the Corporate Debtor as on the date ofcommencement of CIRP is provided below (Sample only):
Cap
ital
Str
uct
ure
an
d S
har
eh
old
ing
Pat
tern
Shareholding Pattern:
Shareholding Pattern of the Corporate Debtor is providedby bifurcating the shareholding into 2 parts-
A. Promoter & promoter groupB. Public shareholding, which is further divided into institutions and non-institutions.
2.4 & 2.5 Capital Structure and Shareholding
Particulars No of
shares
Amount
(INR Crore)
Authorized share capital
Equity shares of Rs.10/- each XXX XXX
Preference shares of Rs.10/- each XXX XXX
Issued, subscribed and paid up capital
Equity shares of Rs.10/- each XXX XXX
Preference shares of Rs.10/- each XXX XXX
Table 3Source: Company Annual Report/ Financials/ NSE or BSE filings
Table 4
Source: Company Annual Report/ Financials/ NSE or BSE filings
Particulars No. of
Shares
%
Promoter and
Promoter Group
XXX 40.86%
Public
Institutions
Non-Institutions
XXX 59.14%
2.05%
57.09%Grand Total XXX 100.00%
Total Debt XXX
www.taxguru.in
Page 35
Det
ails
of
Fin
anci
al a
nd
Op
era
tio
nal
Cla
ims
2.6 Financial and Operational Claims
S. No Name of the financial creditors Facility arrangement Amount as per claims filed Amount Admitted (A) Difference Voting Right
1 XXX XXX XXX XXX XXX XXX
2 XXX XXX XXX XXX XXX XXX
3 XXX XXX XXX XXX XXX XXX
4 XXX XXX XXX XXX XXX XXX
5 XXX XXX XXX XXX XXX XXX
6 XXX XXX XXX XXX XXX XXX
7 XXX XXX XXX XXX XXX XXX
8 XXX XXX XXX XXX XXX XXX
9 XXX XXX XXX XXX XXX XXX
Total - - - -
S. No Name of the Operational creditors Amount As per claims filed
Source: Company Annual Report/ Company Website/ Management Discussions
www.taxguru.in
Page 37
Plant Details
Particulars INR Crore
Plant Name XXX
Location XXX
Revenue per unit XXX
Cost per unit XXXXXX state
Order Details
Buyer Location XXX
Name of Parts XXX
Volume per month XXX
Value per month XXX
VA % XXX
Customer XX
2.7 Summary of Key Orders
XXX state
A summary of all contracts / orders with key customers to be listed here and other details such as estimated Revenue and EBITDA in the coming financial years can be added
Plant Details
Particulars INR Crore
Plant Name XXX
Location XXX
Revenue per unit XXX
Cost per unit XXX
Long Term PPA
Buyer Location XXX
Name of Parts XXX
Volume per month XXX
Value per month XXX
VA % XXX
Customer XX
www.taxguru.in
Page 38
Divisions
Products
Key Raw material
Share of Key
Supplier
Percentage ofSupplier Dependance(By division)
2.8 Supply Chain InfrastructureSu
pp
lier
An
alys
is
ABC Ltd. (Corporate Debtor)
Product 1 Product 2 Product 3 Product 4
Supplier 1Supplier 2Supplier 3
Supplier 1Supplier 2Supplier 3
Supplier 1Supplier 2Supplier 3
Supplier 1Supplier 2Supplier 3
Percentage share
Percentage share
Percentage share
Percentage share
Division 1 Division 2 Division 3 Division 4
Supplier 1 Supplier 2 Supplier 3 Supplier 4
Chart 4
Source: Company Annual Report/ Company Website/ Management Discussions
www.taxguru.in
Page 39
Location 2• Land area – XXX• Head Count - XXX
Himachal PradeshLocation 1• Land area –XXX• Head Count - XXX
Haryana
Rajasthan
Location 3• Land area – XXX• Head Count – XXX
2.9 Facilities and Capability
Value Proposition
Some value proposition points and other keyobservations noted in the study of the facilities, whichwill benefit the investors and other stakeholders to behighlighted here.
❑ Nature of facility such as machining, assembly, etc
Table 7Source: Company Annual Report/ Company Website/ Management Discussions
Unit 2
► Highlight
www.taxguru.in
Page 41
2.10 Capex Requirement
► Details of funds required for the remaining part/incompletepart of the project.
► Funds infused into the plant till date.
► Plant specification (Assembly, machining, forging, etc.) anddetails of the areas/machinery where funds are to beemployed for completion of the plant.
► Purpose of the new plant- Manufacturing a new product,expansion of capacity of existing products, new customer, etc.
► Additional revenue and EBITDA which will be generated aftercompletion and will be sufficient to service the interest anddebt obligations relating to the project.
Plant Capacity XXX (X plants with XXX units Capacity)
Location Enter Location
CoD Enter commencement of operations date of all units after fund infusion from XXX date
Project Cost Enter Total cost and Cost/unit
Funding means
Debt: INR XXX Equity: INR XXX
Percentage of Completion
XX %
Fund infusion required for completion of Plant 1/2/3…
► Details of funds required for the remaining part/incompletepart of the project.
► Funds infused into the plant till date.
► Plant specification (Assembly, machining, forging, etc.) anddetails of the areas/machinery where funds are to beemployed for completion of the plant.
► Purpose of the new plant- Manufacturing a new product,expansion of capacity of existing products, new customer, etc.
► Additional revenue and EBITDA which will be generated aftercompletion and will be sufficient to service the interest anddebt obligations relating to the project.
Plant Capacity XXX (X plants with XXX units Capacity)
Location Enter Location
CoD Enter commencement of operations date of all units after fund infusion from XXX date
Project Cost Enter Total cost and Cost/unit
Funding means
Debt: INR XXX Equity: INR XXX
Percentage of Completion
XX %
www.taxguru.in
Page 42
Board of Directors
SAMPLE
OperationsVice President
Performance ReviewSenior Manager
Turnkey DivisionVice President
CommercialHead
Costing and MISSenior Manager
AccountsDGM
Supply ChainDGM
Internal AuditSenior Manager
Sales and MarketingSenior Manager
HR and AdminSenior Manager
Company SecretaryQualityHead
Design/ R&DHead
2.11 Organisation Structure
Source: Company Annual Report/ Company Website/ Management Discussions
www.taxguru.in
Page 43
2.12 Board of Directors
Director Brief profile
Person 1
Director► Brief Profile
Person 2
Director► Brief Profile
Person 3
Director► Brief Profile
Person 4
Director► Brief Profile
Person 5
Whole-Time Director► Brief Profile
Source: Company Annual Report/ Company Website/ Company Secretarial Records
2.13 Details of Statutory Approvals and Compliances
➢ Details of all relevant statutory approvals/compliances/licences etc to be furnished including but not limited
to:
➢ Environmental Clearances
➢ Fire and Safety Clearance
➢ Pollution Control
➢ Certificate to Operate
➢ Statutory Licences/Clearances
➢ Registration Certificates
➢ Registration under Tax Authorities
➢ Details to be furnished to include current status, last renewed date, next renewal date, costs involved,
relevant authority involved priority of approvals etc
www.taxguru.in
Page 46
2.14 Investment OverviewK
ey In
vest
me
nts
he
ld
A Ltd.49%
B Ltd.41.1%
E ltd.35.88%
Gs Pvt Ltd. 41.28%D Pvt Ltd.
41.19%
F Ltd.41.34%
G Pvt. Ltd.15.02%
C Pvt Ltd.41.17%
Foreign Subsidiaries
100%
Parent Co. Public
51% 43%
Promoter Shareholding
6%
ABC Ltd. (Corporate Debtor)
A snapshot of the Key Investments held by the corporate debtors can be given as shown below:
Source: Company Annual Report/ Company Website/ Company Secretarial Records
www.taxguru.in
Page 47
Products:
A list of the key products of the entity, category and subcategory of products. Sample format given:
2.14 Investment 1/2/3…
Description of each Investment of the corporate debtor can be given highlighting the following aspects of each investment:
Category
Products
Manufacturing
Engine
Transmission
• Product names
• Product name
Applications • Final Application
Business Description:
Give a brief description of the business of the entity with detailssuch as nature of business, plants or office location, financialdetails or a snapshot of the financials of the entity, date ofinvestment in the entity, status of operations, etc.
Key Customers:
A list of the key customers of the entity, product wise andlocation of plant wise, if applicable.
For Example: Logos of the customer
Headcount (as of 31st March, 2018)- XXX Land Area (in acres)- XXX
• Brief description of the unit and the capacity and overall level of capacity utilization in the past
• Components of Plant’s Core shop includes equipments like: List of equipments at the core shop
Manufacturing plant details
Plant 1- XXX, XXX
www.taxguru.in
Page 48
Industry Overview
www.taxguru.in
Page 49
❑ Nature of industry
❑ Concise overview of the industry should include its competitors and their operations.
❑ Industry growth trend in the past and future outlook of the industry
❑ Macroeconomic factors affecting the industry
❑ Change in laws and regulations governing the industry (Favourable or not)
❑ Highlight factors like geographical growth, consumer base, price fluctuations, past performances and income projections.
❑ Sector wise break up of customers into Private/State Government/Central Government, etc.
❑ Key Investment perks in the industry
❑ Seasonality/Business Cycle of the Industry.
3. Industry Overview
Detailed Industry analysis to be furnished and the following points can be considered for the same:
➢ Ministry of XYZ sector/Govt body➢ Transparent and well evolved bidding mechanism➢ Appellate tribunal for relevant sector for quick resolution
of disputes
Private43%
Central24%
State33%
Key Sectors
Key remarks
on segment
wise break
up…………………
……
Investment Perks
100% FDI Allowed
Tax benefitsIndustry Specific
incentives..
Chart -6 Chart -7
Chart -8
Source: CRISIL/ICRA report or Specific industry reports from SIAM, NHAI, S&P, Capital IQ, etc Source: CRISIL/ICRA report or Specific industry reports from SIAM, NHAI, S&P, Capital IQ, etc
Source: CRISIL/ICRA report or Specific industry reports from SIAM, NHAI, S&P, Capital IQ, etc
www.taxguru.in
Page 52
3.3 Key Growth Drivers in the XYZ Sector
DEMAND
SUPPLYPOLICY
SUPPORT
➢ …..
➢ …….
➢ …….
➢ …….
➢ …….
➢ …….
➢ …….
1
2
3
www.taxguru.in
Page 53
Competitor Analysis for a particular Financial Year to be given (Sample given below)
3.4 Competitor Analysis
1469
1127
281
878716
579
29815% 16% 11% 19% 12% 12% 25%-71%
8.1%15%
2% 3%
6%
11.5%
-80%-70%-60%-50%-40%-30%-20%-10%0%10%20%
0200400600800
1000120014001600
Sales (In RsCrore)
EBITDAMargin
Net Margin
Production capacity of all competitors to be given (Sample given below)
217786
150000
40000
150000
30000
150000
48000
0
50000
100000
150000
200000
250000
Capacity (MTPA)
Chart -10
Source: CRISIL/ICRA report or Specific industry reports from SIAM, NHAI, S&P, Capital IQ, etc
➢ Apart from this analysis, we have to look at a product wise analysis of each competitor
➢ Mention the latest deals, mergers or acquisitions that have taken place amongst the competitors
Observations/ Comments:
➢ Top 3 players Account for ~XX% of the Total Industries’ Revenue
➢ The Industry Leader is ABC with a top line of XX Cr and EBITDA margin of XX%
➢ Key emerging players are – XYZ, MNO, etc.
➢ XXXX
Chart -9
Source: CRISIL/ICRA report or Specific industry reports from SIAM, NHAI, S&P, Capital IQ, etc
www.taxguru.in
Page 54
Projected Business Plan - Aspirational
www.taxguru.in
Page 55
4.1 Future Growth Strategy
Capacity expansion/utilization Diversifying customer base and product segments
New product development
Long term plan to cover the “high volume” and the “high margin” slices of the [xxxxx] industry
► ABC Ltd. Is currently operating at XX% of its capacity, which isXX% less than its breakeven point.
► Hence, with XXX amount of funds, capacity can be increased toXX% i.e. more than the breakeven point and ABC Ltd can startgenerating positive cash flows.
► Other points for expansion...
► XXX
► XXX
► A very diverse customer base existing already with potential
for expansion/diversification even further.
► List of top 5 existing customers and their percentage share in
total sales.
► List of top 3 potential customers who can be roped in or
ongoing discussions taking place.
► Impact on EBITDA after expansion of customer base.Future growth strategy
► Holistic approach for overall growth of the company.
► Expansion of Customer base/ New product line/ enteringnew market segment or new geographical segment.
► Measures to increase top line/ control bottom line.
► XXX
www.taxguru.in
Page 56
4.2 Assumptions
Key assumption taken for the forecast:
➢ Fund infusion (Working capital/Term loan/Equity) for achieving the operational level projected including capex➢ Factors considered while projecting- Market share growth, Average selling price , Existing order book, Average cost of the product.➢ Assumption for demand in the forecast period - how it will increase/decrease, based on historical trend or industry reports.➢ Assumptions used for other expenses:
• Manufacturing Overheads• Bifurcation into fixed, variable and semi variable• Employee benefit expenses• Indirect Costs• Other expenses
➢ Assumptions for Management Expertise and Adequate Capitalisation.➢ Listing reports which are relied on for the following:
• Industry growth rate assumptions;• Average Selling Price in the forecast period;• Average Cost Price in the forecast period;• Market Share, • Inflation, etc
• Working capital assumptions
www.taxguru.in
Page 57
4.3 Profit & Loss for the Forecast Period
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Revenue from Operations XXX XXX XXX XXX XXX
Other Operating Income XXX XXX XXX XXX XXX
Aggregate Revenue XXX XXX XXX XXX XXX
Total cost of materials consumed XXX XXX XXX XXX XXX
Employee benefits expense XXX XXX XXX XXX XXX
Other Mfg. expenses XXX XXX XXX XXX XXX
Power and Fuel XXX XXX XXX XXX XXX
Transportation charges XXX XXX XXX XXX XXX
Plant overheads XXX XXX XXX XXX XXX
Other SG&A XXX XXX XXX XXX XXX
Total Expenses XXX XXX XXX XXX XXX
EBITDA XXX XXX XXX XXX XXX
Net Profit XXX XXX XXX XXX XXX
Observations/Commentary: (Commentary on Key Observations should be given as follows)
➢ The above projections have been made assuming the utilisation of idle capacity. Hence, we can see growth in revenue and EBITDA levels.
➢ Overheads are decreasing constantly basis our understanding of the efficiency in the production processes and economies of scale. Sufficient demand for the product line is present.
➢ XXXXXX➢ XXXXXX➢ XXXXXX
Table 8
Source: Company Industry Report/ Company Website/ Management Discussions
www.taxguru.in
Page 58
4.4 Company level EBITDA Analysis over the Forecast Period
Administrative expenses as % of revenue
EBITDA
Raw Material Cost as a % of revenue
Selling & distribution expenses as % of revenue
3.8% 3.8% 3.6% 3.3% 3.0% 2.8%
50.0%52.0%
53.0%51.0%
50.0%48.0%
1.6% 1.6% 1.5% 1.4% 1.3% 1.3%
► [COMMENTARY]
Manufacturing expenses as a % of revenue
13.0% 13.0%
13.2%13.1%
12.8% 12.8%
This type of EBITDA analysis can be shown with commentary on the right
20.2% 20.3% 20.4%21.0% 21.6% 21.9%
Year 1 Year 2 Year 3 Year 4 Year 5
Chart -11
Source: Company Industry Report/ Company Website/ Management Discussions
www.taxguru.in
Page 59
Annexures
Serial Number Details
Annexure 1 Process Overview
Annexure 2 Bid Evaluation Criteria
Annexure 3 Public Announcement
Annexure 4 Expression of Interest
Annexure 5 Claims of Various Creditors
Annexure 6 Details of Key Investments
Annexure 7 Process Note
www.taxguru.in
Page 60
Process Overview
www.taxguru.in
Page 61
Background and Initiation of CIRP Proceedings underNCLT:
❑ Date of admission in NCLT
❑ Name of Interim Resolution Professional
❑ Name of Process Advisors & Legal Counsel
❑ Name of Valuers Appointed
❑ Summary of claims Filed & Admitted
❑ Brief summary of Flow of events post initiation ofCIRP
Process Overview
Brief profile of Insolvency Resolution Professional (IRP):
❑ Professional background of the IRP – Highlight thecurrent occupation and designation in theindustry or professional firm. EducationalQualification and number of years of experiencein different organisations or in practice.
❑ Select Experience of the IRP – Highlight theongoing engagements and engagements done inthe past to show how that experience will help.
EOI Invitation under NCLT:
❑ Date on which EOIs were invited
❑ EOIs received under the NCLT process
❑ EOIs accepted after the last date of submission ofEOIs
❑ Tabular summary of EOIs received, their status aseligible to bid or not and whether they arestrategic investors or financial investors.
Binding Financial Bid/Binding Resolution Plan:
❑ Last Date of submission of Binding Financial Bid
❑ Summary of Binding Financial Bids received
❑ Last Date of submission of Binding Resolution Plan
❑ Date of discussion of plans with the COC.
❑ Details of Negotiations with highest evaluatedbidder
❑ Name of the applicant selected as successfulresolution applicant
www.taxguru.in
Page 62
► Financial snapshot and historical numbers to be used for analysis can be obtained from company annual reports and / or audited financials of the corporate debtor
► Discussions with management / KMPs of the corporate debtor to get data of current market share, major customers, major suppliers of raw material, alternate sourcing arrangements etc
► Sector/Industry reports can be sourced from secondary database providers (Example: For the automotive sector report issued by SIAM or ACMA)
► Institutional / Government Publications to be referenced for policy updates and key statistics
► Industry reports from various credit rating agencies can be referenced especially when the agency is initiating coverage on a particular Industry/Company
► News in the media to be referenced for recent developments in the company/industry
Indicative Reference List
www.taxguru.in
Page 1
Annexure-A2
Specimen of
Information Memorandum For a Corporate Debtor in Power Sector
www.taxguru.in
Page 2
Abbreviations
ACQ Annual Contracted Quantity
B.Tech Bachelor of Technology
BoP Balance of Plant
BPTA Bulk Power Transmission Agreement
BTG Boiler Turbine Generator
CAGR Compound Annual Growth Rate
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
CoD Commercial Operation Date
Cr Crores
EPC Engineering, procurement and construction
FDI Foreign direct investment
FSA Fuel Supply Agreement
GCV Gross Calorific Value
INR Indian National Rupee
IPP Independent Power Producer
KCal Kilo Calories
Kg kilogram
Kms Kilometers
kV Kilovolt
kWh Kilowatt-hour
M.S. Masters of Science
M.Tech Master of Technology
Mn Million
MOC Ministry of Coal
MOD Merit order dispatch
MTPA Million Tons Per Annum
MW Mega Watt
O&M Operation and Maintenance
PLF Plant Load Factor
PPA Power Purchase Agreement
REC Rural Electrification Corporation Limited
ROM Run of Mine
Rs Rupees (Indian)
SERC State Electricity Regulatory Commission
SHR Station Heat Rate
St. Station
tn Tonne
TN Tamil Nadu
TPP Thermal Power Plant
UP Uttar Pradesh
WPI Wholesale Price Index
www.taxguru.in
Page 3
Disclaimer
This information memorandum is formulated by ABC (Name of Resolution Professional) in consultation with XYZ Ltd (Name of Professional Advisor, if any)which has been appointed as a professional advisor to the Resolution Professional (RP). The purpose of this document is to assist the recipient in decidingwhether they wish to proceed with a further investigation of the Company, and in putting forward resolution plan for the Company in accordance with theInsolvency and Bankruptcy Code, 2016 (hereinafter as “IBC” or “Code”) and the Regulations made thereunder, as amended from time to time. ThisInformation memorandum has been prepared in furtherance of Section 29 of the Code. The information memorandum contains specific information of thecorporate debtor including but not limited to the details as prescribed under sub-regulation 2 of Regulation 36 of the Insolvency and Bankruptcy Board ofIndia (Resolution process for Corporate Persons) Regulations, 2016 (hereinafter as “CIRP Regulations”).
This information memorandum and the information contained herein is not intended to form the basis of any investment decision by a prospectiveresolution applicants. Interested parties should carry out their own investigations and analysis of the Corporate Debtor and of the data referred to in thisInformation Memorandum and should consult their own advisers before submitting a resolution plan. Neither this document, nor anything containedherein, should form the basis of, or be relied upon in connection with any contract, agreement, undertaking, understanding or any commitment orinvestment decision whatsoever.
The information contained/disclosed in the information memorandum is as provided by the Corporate Debtor and the creditors of the Corporate Debtor. Norepresentation or warranty, express or implied, is given by the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional orXYZ Ltd. (Name of Professional Advisor) as to the accuracy, authenticity or completeness of the contents of this Memorandum or any other document orinformation supplied, or which may be supplied at any time or any opinions or projections expressed herein or therein, nor is any such party under anyobligation to update the Memorandum or correct any inaccuracies or omissions in it which may exist or become apparent. This Memorandum should not beconsidered as a recommendation by the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional or XYZ Ltd. (Name ofProfessional Advisor) to invest in the Corporate Debtor and each prospective applicant must make its own independent assessment of the merits orotherwise of investing in the corporate debtor.
This information memorandum contains the forecasts, projected financial information and other predictive statements that represent the ResolutionProfessionals and its Professional Advisors assumptions in light of information available in public domain, about circumstances and events that have not yettaken place. The said forecasts, projected financial information and other predictive statements are based on market/industry trends/predictions/estimatesand other factors. Accordingly, there can be no assurance or guarantee that the projected results will be attained. The projected results are not definitiveand are subject to change without notice. The future projections enclosed in this information memorandum involve risks and uncertainties, based on variousfactors and variables, which may cause actual performance to differ materially from any projections of future performance The Resolution Professional andits Professional Advisors at no time guarantees the accuracy/authenticity of the future projections. In particular, but without prejudice to the generality ofthe foregoing, no representation or warranty whatsoever is given in relation to the reasonableness or achievability of the projections contained in thisInformation Memorandum or in relation to the bases and assumptions underlying such projections and you must satisfy yourself in relation to thereasonableness, achievability and accuracy thereof. The recipient acknowledges that it will be solely responsible for its own assessment of the marketprojections and future prospects/performance of the corporate debtor
www.taxguru.in
Page 4
Disclaimer Cont.
Memorandum and the information contained therein is confidential and subject to the undertaking executed between the corporate debtor and therecipient in pursuance of Section 29 (2) of the Code. The recipient by way of the undertaking, unconditionally acknowledges to undertake to (a) comply withthe provisions of the law for the time being in force relating to confidentiality and insider trading (b) protect the intellectual property of the corporatedebtor it may have access to and (c) is statutorily obligated not to share the information memorandum or its contents with third parties unless (a) and (b)above have been complied with. The recipient further also acknowledges that the information contained in the information memorandum shall not be usedto cause undue gain or undue loss to itself or to any other persons and that the recipient shall comply with the requirements under Section 29(2) of theCode.
No responsibility or liability is accepted for any loss or damage arising whatsoever that you may suffer as a result of this Information memorandum or theinformation contained herein and any and all responsibility and liability is expressly disclaimed by the Resolution Professional and its Professional Advisorand its respective partners, directors, officers, affiliates, employees, advisors or agents.
Should this Information memorandum (through the act or default of the recipient) reach other persons without the resolution professional’s writtenconsent, the recipient shall indemnify the resolution professional and its professional advisor including its respective partners, directors, officers, affiliates,employees, advisors or agents against any loss or damage or other liabilities (including all costs), which they may suffer as a result.
By accepting a copy of this information memorandum, the recipient is deemed to have acknowledged and accepted that the terms and conditions of thedisclaimer notice and that it formed an integral/material part of this information memorandum. The recipient further is deemed to have unconditionallyacknowledged that the Corporate Debtor, any of its officers, employees or its agents, the Resolution Professional or XYZ Ltd. (Name of Professional Advisor)do not accept any liability for any and all information contained in this information memorandum. The recipient is deemed to have acknowledged that theinformation contained in the information memorandum shall not be utilised/used for any other purpose other than for the preparation of the ResolutionPlan as defined in the Code.
The information memorandum and the information contained herein may not be inclusive or contain all information which the recipient considers material.While the Resolution Professional shall endeavour to furnish further relevant information/details/ clarifications, the resolution professional is under noobligation to provide the recipient with any further relevant information/details/clarifications. In the event any additional information/clarifications are soprovided they shall be unconditionally subject to this disclaimer notice irrespective of whether it has been specifically provided for or not.
This information memorandum and the information contained herein should not be printed, reproduced, transmitted, sold, distributed, or published by therecipient without prior written approval of the Resolution Professional. The recipient further acknowledges to return and /or destroy this informationmemorandum at the written request of the resolution professional. The resolution professional shall act as the primary point of contact for the recipientsand any and all correspondences/clarifications should only be addressed to the resolution professional. This Information memorandum is issued by theresolution professional of the corporate debtor without incurring any liability/commitment on the part of itself or the professional advisor (including but notlimited to the professional advisors respective partners, directors, officers, affiliates, employees, advisors or agents) or the corporate debtor or any of itsofficers, employees or its agents
www.taxguru.in
Page 5
Contact Details:
For any further enquiries, please contact:
[Name]Resolution ProfessionalName of Corporate DebtorsTel: MobileEmail
www.taxguru.in
Page 6
Contents
Part A Statutory Information Memorandum under IBC
Part B Business Transaction Information Memorandum
www.taxguru.in
Page 7
Part A
Statutory Information Memorandum (Statutory IM)
www.taxguru.in
Page 8
Model Information MemorandumTable of Contents
Statutory Information Memorandum
1. Related Sections and Regulations
2. Contents as given in Regulation 36
3. Description of Assets & Liabilities and Financial Statements (Regulation 36(2)(a),(b) & (c))
4. List of Creditors (Financial, Operational, Employees & Others) (Regulation 36(2)(d))
5. Dues to/from Related parties (Regulation 36(2)(e))
6. Guarantor Details (Regulation36(2)(f))
7. Members or partners having- 1% or more stake (Regulation36(2)(g))
8. Details of all material litigation and an ongoing investigation (Regulation36(2)(h))
9. No of Workers & Employees and their dues (Regulation36(2)(i))
► Table 5 : Details of members / partners holding at least one per cent stake………………………………………12
► Table 6 : Material Litigation..……………………………………………………………………………………………………………..13
► Table 7 : Workers & Employees and their dues………………………………………………………………………………….14
Index of Tableswww.taxguru.in
Page 10
1. Relevant Sections and Regulations
Information Memorandum (Statutory IM) is a memorandum prepared by resolutionprofessional under sub-section (1) of section 29.
Provides that the resolution professional shall prepare an information memorandum in suchform and manner containing such relevant information as may be specified by the Board forformulating a resolution plan.
The resolution professional shall provide to the resolution applicant access to all relevantinformation in physical and electronic form, provided such resolution applicant undertakes—
(a) to comply with provisions of law for the time being in force relating to confidentialityand insider trading;
(b) to protect any intellectual property of the corporate debtor it may have access to; and
(c) not to share relevant information with third parties unless clauses (a) and (b) of thissub-section are complied with.
Explanation.—For the purposes of this section, “relevant information” means theinformation required by the resolution applicant to make the resolution plan for thecorporate debtor, which shall include the financial position of the corporate debtor, allinformation related to disputes by or against the corporate debtor and any other matterpertaining to the corporate debtor as may be specified.
Provides for the contents of the Statutory IM and the manner in which it will be submittedto each member of the CoC and any potential resolution applicant.
Section 5(10)
Section 29(1)
Section 29(2)
Regulation 36 of IBBI (IRPfor Corporate Persons)Regulations, 2016
www.taxguru.in
Page 11
2. Contents of Statutory IMRegulation 36 of IBBI (IRP for Corporate Persons) Regulations, 2016
S.No. Regulation Particulars
1 36(2)(a) Assets and Liabilities with such description, as on the insolvency commencement date, as are generally necessary for ascertaining their values.
2 36(2)(b) & 36(2)(c) The latest annual financial statements and audited financial statements of the corporate debtor for the last two financial years and provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application
3 36(2)(d) A list of Creditors containing the names of creditors, the amounts claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims
4 36(2)(e) Particulars of a debt due from or to the corporate debtor with respect to related parties
5 36(2)(f) Details of guarantees that have been given in relation to the debts of the corporate debtor by other persons, specifying which of the guarantors is a related party
6 36(2)(g) The names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake.
7 36(2)(h) Details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities.
8 36(2)(i) The number of workers and employees and liabilities of the corporate debtor towards them.
www.taxguru.in
Page 12
► A member of the committee may request the resolution professional for further information of the naturedescribed in this Regulation and the resolution professional shall provide such information to all members withinreasonable time if such information has a bearing on the resolution plan.
► The interim resolution professional or the resolution professional, as the case may be, shall share the informationmemorandum after receiving an undertaking from a member of the committee or a potential resolution applicantto the effect that such member or resolution applicant shall maintain confidentiality of the information and shallnot use such information to cause an undue gain or undue loss to itself or any other person and comply with therequirements under section 29(2).
2. Contents of Statutory IMRegulation 36 of IBBI (IRP for Corporate Persons) Regulations, 2016
www.taxguru.in
Page 13
1. Assets and Liabilities with such description, as on the insolvency commencement date, as are generally necessary for ascertaining their values.
2. ‘Description’ includes the details such as date of acquisition, cost of acquisition, remaining useful life, identification number, depreciation charged, book value, and any other relevant details.
3. The latest annual financial statements and audited financial statements of the corporate debtor for the last two financial years.
4. Provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application. Generally, provisional financials are made on the date of commencement of the Corporate Insolvency Resolution Process (CIRP).
Table-1
3. Assets & Liabilities and Financial Statements
Particulars Amount
Assets
Fixed Assets XXX
CWIP XXX
Investments (net of provisions) XXX
Loans and Advances XXX
Tax Assets XXX
Inventory XXX
Debtors XXX
Cash and Bank balances XXX
Investment in Mutual Funds XXX
Total Assets XXX
Liabilities
Financial creditors XXX
Operational Creditors XXX
Provisions XXX
Net Worth XXX
Total Liabilities XXX
Source: Financials of corporate debtor as on CIRP date
www.taxguru.in
Page 14
Financial Creditors: All financial creditors have to file their claims in Form C in the prescribed format, after which the Resolution Professional will verify and admit the claims to the extent they have been verified, form the CoC and include the claims of the financial creditors in the IM. All financial creditors have voting rights which is based on the proportion of the financial debt owed to such financial creditor in relation to the financial debt owed by the corporate debtor.Operational Creditors: All operational creditors have to file their claims in Form B in the prescribed format, after which the Resolution Professional will verify and admit the claims of the operational creditors to the extent they have been verified Operational creditors have no voting rights.Employee Claims & Other Claims are filed in Form D & Form E respectively, then they are verified and admitted.
4. List of Creditors- names of creditors, the amounts claimed by them, the amount of their claims admitted and the security interest
Financial, Operational, Employees & Others
Creditor names FacilityAmount of claims
submitted Amount admitted Voting right
Financial creditors XXX XXX 100%A Secured Term Loan XXX XXX 50%B Working Capital Loan XXX XXX 20%C Term Loan XXX XXX 30%
Creditor names FacilityAmount of claims
submitted Amount admitted Voting right
Operational Creditors XXX XXX NAX NA XXX XXX NAY NA XXX XXX NAZ NA XXX XXX NA
Table-2
Source: Data from Corporate Debtor/ Management Discussion/ Financials
www.taxguru.in
Page 15
5. Dues to/from Related Party
Definition of related party in relation to a Corporate Debtor is much wider in scope as compared to the Companies Act, 2013.
It has been defined in section 5(24) of IBC, 2016.
As per Regulation 36(2)(e), particulars of a debt due from or to the corporate debtor with respect to related parties are to be stated in the Statutory IM.
Sample Format
Debt payable to/due from related parties
Name of the party Trade receivables Trade payables Loans/AdvancesAny other
arrangementsNet receivable/
(payable)To/due from related parties:
XXX XXX XXX XXX XXX XXXXXX XXX XXX XXX XXX XXX
Total XXX XXX XXX XXX XXX
Table-3
Source: Data from Corporate Debtor/ Management Discussion/ Financials
www.taxguru.in
Page 16
As per Regulation 36(2)(f), details of guarantees that have been given in relation to the debts of the corporate debtor by otherpersons, specifying which of the guarantors is a related party.
Example: Corporate Guarantee or Personal Guarantee given in relation to the debts by any related party of the corporate debtor
6. Guarantor Details
Sample FormatGuarantees given Designation Facility
Personal guarantees of:XXX XXX XXX
Corporate guarantees of:XXX XXX XXX
Table-4
Source: Security Creation documents along with sanction letter/ Register of Charges created
www.taxguru.in
Page 17
7. Details of Members/Partners Holding at least 1% Stake
As per Regulation 36(2)(g) , the names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake have to be provided in the Statutory IM
Sample Format
Name of the shareholder AddressNature of
ShareholderNo. of fully paid up equity
shares held
Shareholding as a % of total no. of
shares
Promoter GroupXXX XXX Promoter XXX XXX
Non Promoter GroupXXX XXX Non Promoter XXX XXX
Table-5
Source: Annual Report or Financials/ Register of Members
www.taxguru.in
Page 18
As per Regulation 36(2)(h), Details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities have to be provided.
8. Material Litigations
Proceedings init iated by Court / Authority Related Law/ Regulat ion Part ies to the lit igat ion Part iculars of case
Not ice received for
amount
Amount Shown as
Cont ingent
Liabilit y Lawyer Involved
Labour Related cases
XXX XXX XXX XXX XXX XXX XXX XXX
Direct & Indirect Taxes Related cases
XXX XXX XXX XXX XXX XXX XXX XXX
Other cases
XXX XXX XXX XXX XXX XXX XXX XXX
Sample FormatTable-6
Source: Annual Report or Financials/ Management discussions
www.taxguru.in
Page 19
As per Regulation 36(2)(i), the number of workers and employees and liabilities of the corporate debtor towards them have to be provided.
9. Number of Workers and Employees and their Dues
Number of Employees and amount due to employees as on CIRP Commencement date
Particulars No. of Employees Balance outstanding as at CIRP Commencement Date
Number of Employees XXX
Number of Workers - Regular XXX
Number of Workers - Casual XXX
Wages & Salary including provision XXX
LTA and Medical Payable XXX
Reimbursements XXX
Provident Fund XXX
ESI XXX
Staff expenses unpaid XXX
Full and Final Settlement payable XXX
Any other XXX
Total XXX XXX
Sample Format
Table-7
Source: Management Discussions/ Data from Corporate Debtor
www.taxguru.in
Page 20
PART-Brt B –
Business Transaction-For a Corporate Debtor in Power
Sector
www.taxguru.in
Page 21
Model Information MemorandumsTable of Contents
1. Executive Summary, Key Investment Highlights and Indicative Project Timelines
2. Company Overview
2.1 Corporate Debtor Profile
2.2 Business Evolution
2.3 Project Details
2.4 Current Scenario, Snapshot of Financial Performance and Interim Finance
➢ Chart 10 : Production Capacity………………………………………………………………………………………………………... 36
www.taxguru.in
Page 25
1. Executive Summary
Company Overview
What ABC Ltdoffers?
► A Ltd. (“the Company”) is a major player in the power sector operating in renewable/non renewable segment.
► Has a total installed capacity of XXX MW
► Recently approvals obtained for 2 additional hydro/wind/solar units of XX XMW each
► Operates X state of art Manufacturing facilities in ABC/DEF/GHI
► Has deep-rooted and long-standing contracts/PPAs with XXX for X years at INR X per unit
► Owned and run by professional management
► CIRP background
The Transaction
► Opportunity to increase the power generation capacity
► Lower cost of generation due to operational efficiencies, optimisation of logistics cost w.r.t. coal procurement
► Platform for a strategic partner to enter/ expand its operations in various segments (Hydro/coal/wind)
► PLF of thermal power plant > 80%
► [mention opportunity here]
www.taxguru.in
Page 26
1. Key Investment Highlights
Diverse portfolio across Thermal, wind and solar plants.1
State-of-the-art power plants with latest technology machines
2
Professional management team and corporate governance standards benchmarked to best industry practices
3
Operating in highly government regulated sector, with various programmes in pipeline to accelerate industry growth4
www.taxguru.in
Page 27
1. Indicative Project Timelines
✓ Communication strategy
✓ Day 0 plan✓ Risk identifications
& mitigation ✓ Application
formalities
File application to NCLT
✓ Public Announcement
✓ Take control of the assets
✓ Roll out new org. chart
✓ Prepare an IM✓ Meetings with key
suppliers & customers
✓ Constitute Committee of all Creditors
✓ Agree a plan with customers
✓ Funding requirement and identify potential investor
Approval of the resolution plan by CoC & NCLT
✓ Sale of any non core assets ✓ Update list of claims from
creditors✓ Diligence / Meeting with
potential resolution applicant
✓ Optimize cash and cut cost
✓ Negotiate with different creditors
Planning 0-30 days 31-60 days 61-120 days 121-150 days 151-180 days
Project & crisis management
Negotiate plan with creditors
Cash flow management
Collect and validate claimsCompliance with IBC rules
Stakeholder management
✓ Review all resolution plan received before presenting to CoC
www.taxguru.in
Page 28
Company Overview
www.taxguru.in
Page 29
POWER & UTILITIES COMPANY A is the leading power company in Japan, operating around the entire P&U value chain
In April 20XX, POWER & UTILITIES COMPANY A transitioned to a
Holding Company System, spinning off its three business
segments:Generation Transmission and Distribution Retail
POWER & UTILITIES
COMPANY A
POWER & UTILITIES
COMPANY A
POWER & UTILITIES
COMPANY A
Sales (20XX) XXX
Net Income (20XX) XXX
Number of employees
(31 March 20XX)XXX
Credit Rating Ba3 (Moody’s, 20XX)
Fortune 500 Ranking
(20XX)
# (If applicable)
Total: 66.8 GW
Generation Mix
The company has a portfolio of thermal, hydroelectric, and nuclear,
as well as renewable energy power plants, including solar, wind, and
hydro. It also engages in the design of power generation and
distribution facilities
Thermal constitute the highest in energy mix with more than 65%
contribution. Renewable capacity grew by XX% in 20XX but still
lowest in contribution
Geographic Reach, Strategic and Expansion Plans
66.3%
65.9%
18.9%
19.1%
14.8%
14.9%
1
2
Thermal Hydro Solar
Total: XX GW
► Currently, it supplies
electricity only in XXX,
especially in CITY
metropolitan area.
~35% customers
serviced across
XXX (as of March
2016)
► With plans to increase in presence
geographically, it collaborated with XX in
July 2016, to form a JV — ABCD. Cu
sto
mer
Bas
e
Sources: POWER & UTILITIES COMPANY A’s annual reports and company website
► The company aimed to complete installation of smart meters in every
household by 2020
► POWER & UTILITIES COMPANY A introduced new service amid
liberalization, such as new rate plans, web service to enhance
electricity usage, as well as alliances with 40 companies in other
sectors
POWER & UTILITIES COMPANY A generates, transmits, and distributes electric power and operates through fuel & power, power
grid, and customer service segments
2. Company Overview
2.1 Corporate Debtor Profile
www.taxguru.in
Page 30
2.2 Business Evolution
1975-2000
2005-082000-05
2008-11
2011-present
► Inception- XXX was Incorporated in June, XXXX
► []
► []
► []
► []
Evolved over the last 4 decades to become one of the frontline players in the [xxxx] industry in India
Going forward, the Company has opportunity
to _________and aim at higher __________
www.taxguru.in
Page 31
2.3 Project DetailsXXX MW operational plant in XXX (Location)
Approvals obtained for 2 additional units of XX XMW each → Total potential of XXX MW installed capacity at the site
Project Size XXX MW (X plants with XXX MW Capacity)
Location Enter Location
CoD Enter commercial operation date of all units
Project Cost Enter Total Project cost and Project Cost/MW
Funding meansDebt: INR XXX Equity: INR XXX
Coal linkage Source of Coal (For thermal power plants) and FSAs
1 USD = INR 65
www.taxguru.in
Page 32
2.4 Current Scenario
► Thermal power plants are sitting idle due to higher cost of generation per unit as compared to wind and solar energy.
► Threat of new rivals as new players are coming in the renewable energy sector.
► Liquidation or Hostile Takeovers by capital rich companies to create synergy benefits and capture market share.
► XXX
► XXX
► Lack of availability of Natural gas and inadequategas pipeline infrastructure resulting in the projectoperating at low/no PLF.
► PPA with XXX state board has expired in XXMonth, 20XX. Project is currently pursuingrenewal of PPA for additional term of 10 years,however there is uncertainty over the same dueto low demand and higher variable cost of thesame.
► No definitive PPA for Power Offtake of Project II& Project III. Due to low power demand and Highvariable cost of generation, power sale could notbe tied up.
Technical Issues
► Lower EBITDA and negative free cash due tolower power generation and under utilisation ofcapacity. Hence, company is not able to currentlyservice its full interest and debt obligations.
► Removal of subsidies by the Governmentresulting in increase in variable cost ofgeneration per unit.
► Lack of PPAs resulting in non recovery of Fixedcost. Hence, negative cash flows.
► XXX
► XXX
► XXX
Financial Issues
Macroeconomic Factors
www.taxguru.in
Page 33
Financial Summary
1. The consistent increase in revenue in the last 2years is in line with the increasing trend as seen inthe industry.
2. Low EBITDA margin along with calculated InterestCoverage Ratio and Debt Service Coverage Ratioshows the difficulty in servicing the finance costand principal instalments.
3. Increasing inventory and trade receivables highlightsworking capital being blocked and hence, theliquidity problems faced by A Ltd.
4. XXXXXX
5. XXXXXX
6. XXXXXX
Income Statement Summary
Particulars FY 1 FY -1 FY -2
Revenue from Operations
Other Income
Operating Expenses
EBITDA
Depreciation
EBIT
Interest expense
EBT
PAT
Balance sheet as on XX/XX/XXXX
Particulars FY 1 FY -1 FY -2
Equity
- Net Worth
Non- Current Liability
- Long term loan
- Others
Current Liability
- Sundry creditors
- Others
Total Equity and Liability
Assets
Non-Current Assets
- Investments
- Others
Current assets
- Debtors
- Cash
Total Assets
2.4 Snapshot of Financial Performance
Source: Company Annual Report/ Historical Financials
www.taxguru.in
Page 34
2.4 Interim Finance
Current Status
• Advances received from key customers to keep thebusiness afloat and maintain continuity ofsupplies; to be repaid on offset against sales basis
• Delay in salaries & wages resulting in low moraleacross the company; inability to retain/deployworkers at the required level impactingproduction and sales
• At current levels of production, cash gap projectedto hit INR 10 Cr by April, resulting in totalshutdown of, unless Interim Finance is raised
Projected Cash-flow
Particulars Mar Apr May Jun
Projected inflows 38 39 34 34
Projected outflows 43 47* 43 43
Net Cash after opening
adjustments(2) (8) (10) (10)
Cumulative cash gap (2) (10) (20) (30)
Estimated Interim Finance Required: INR XX Cr
• Accumulation of month on month operatinglosses on account of operating below break evenlevels could lead to closure
• Low probability of achieving good bids/ resolutionplans on account of sub-optimal operations andabsence of confidence from customers
• XXXX• XXXX
• Amount of Interim Finance : INR XXCr.• Period : CIR period• Upfront fee : 2% on the disbursed amount• Rate of Interest :XX6% P.A (Interest payable monthly)• Repayment : No repayment during CIR period
Challenges without Interim Finance
Indicative Term Sheet
www.taxguru.in
Page 35
Capital Structure:
Capital Structure of the Corporate Debtor as on the date ofcommencement of CIRP is provided below (Sample only):
Cap
ital
Str
uct
ure
an
d S
har
eh
old
ing
Pat
tern
Shareholding Pattern:
Shareholding Pattern of the Corporate Debtor is providedby bifurcating the shareholding into 2 parts-
A. Promoter & promoter groupB. Public shareholding, which is further divided into institutions and non-institutions.
2.5 & 2.6 Capital Structure and Shareholding
Particulars No of
shares
Amount
(INR Crore)
Authorized share capital
Equity shares of Rs.10/- each XXX XXX
Preference shares of Rs.10/- each XXX XXX
Issued, subscribed and paid up capital
Equity shares of Rs.10/- each XXX XXX
Preference shares of Rs.10/- each XXX XXX
Source: Company Annual Report/ Financials/ NSE or BSE filingsSource: Company Annual Report/ Financials/ NSE or BSE filings
Particulars No. of
Shares
%
Promoter and
Promoter Group
XXX 40.86%
Public
Institutions
Non-Institutions
XXX 59.14%
2.05%
57.09%Grand Total XXX 100.00%
Total Debt XXX
www.taxguru.in
Page 36
Det
ails
of
Fin
anci
al a
nd
Op
era
tio
nal
Cla
ims
2.7 Financial and Operational Claims
S. No Name of the financial creditors Facility arrangement Amount as per claims filed Amount Admitted (A) Difference Voting Right
1 XXX XXX XXX XXX XXX XXX
2 XXX XXX XXX XXX XXX XXX
3 XXX XXX XXX XXX XXX XXX
4 XXX XXX XXX XXX XXX XXX
5 XXX XXX XXX XXX XXX XXX
6 XXX XXX XXX XXX XXX XXX
7 XXX XXX XXX XXX XXX XXX
8 XXX XXX XXX XXX XXX XXX
9 XXX XXX XXX XXX XXX XXX
Total - - - -
S. No Name of the Operational creditors Amount As per claims filed
Plant 1• Land area – XXX• Head Count – XXX• Type-Thermal/ Hydro/
Wind/Solar
Himachal Pradesh
Plant 2• Land area –XXX• Head Count – XXX• Type-Thermal/ Hydro/
Wind/SolarHaryana
Rajasthan
Plant 3• Land area – XXX• Head Count – XXX• Type-Thermal/ Hydro/
Wind/Solar
2.8 Facilities and Capability
Source: Company Annual Report/ Company Website
Location Details (For each location)
Location 1
◼ Located in XXX village in XXX district of XXX.
◼ XX Kms away from the nearest coal mine
Location 2
◼ Located in XXX village in XXX district of XXX.
◼ XX Kms away from the nearest coal mine
Location 3
◼ Located in XXX village in XXX district of XXX.
◼ XX Kms away from the nearest coal mine
Water Source (For each location)
◼ XXX water reservoir, ~24 kms from the XXX Dam
Features of Land (For each location)
◼ ~XXX acres of land in possession
◼ Plain terrain, no rehabilitation or resettlement
involved
www.taxguru.in
Page 38
Project/Plant
Particulars INR Crore
Project Cost XXX
Debt (77.49) XXX
Equity (22.51) XXX
Cost per MW 4.32
XXX state
Long Term PPA
Buyer XXX
Net Capacity 150 MW
PPA start date 27th May, 20XX
PPA end Date 31th May, 20XX
Levellized Tariff (INR) 4.47
Contract 1 - Power Purchase Agreement: 1
2.9 Summary of PPAs/Key contracts
Project/Plant
Particulars INR Crore
Project Cost XXX
Debt (77.49) XXX
Equity (22.51) XXX
Cost per MW 5.67 XXX state
Long Term PPA
Buyer XXX
Net Capacity 200 MW
PPA start date 27th December, 20XX
PPA end Date 31th December 20XX
Levellized Tariff (INR)
5.02
Contract 2 - Power Purchase Agreement: 2
A summary of all key contracts / PPAs to be listed here along-with the details of tenor of the contract, Levellized tariff etc
www.taxguru.in
Page 39
Transportation Costs
Current Transportation
► Coal from mine is transported through a conveyor belt to a silo and then transported to plants through the Merry Go Round (“MGR”) railway system
► XXXXXX
Going Forward
► Steps to reduce transportation cost to be mentioned here
Domestic coal transport economics
2.9 Fully Tied-up Fuel Sourcing Arrangement
ParameterCurrent (FYXX)
Future forecasted
Total coal (MTPA) XXXX XXXX
Actual weighted average GCV (Kcal/Kg) XXXX XXXX
Landed cost of coal (INR / ton) XXXX XXXX
Price per GCV (INR x (10-3) / kCal) XXXX XXXX
Assured coal supply → nearly XX% coal comes from linkage and balance through e-auction → no dependency on imported coalCoal and transportation costs expected to further come down → lower variable costs to the company → higher positioning on merit order dispatch
Three main sources of coal
► Linkage: FSA with XXX of 4.182 MTPA + additional linkage
► E-auction: Coal auctioned by XXX
► Open market: Coal sourced from third party sources or open market
4.74 , 87%
0.40 , 7%0.30 , 6%
Linkage coal (MTPA,%)
E-auction (MTPA, %)
Open market (MTPA,%)
► As a result, entire billing difference is being reimbursed for the past 3- 6months → landed coal cost expected to come down significantly FY 18onwards
► Gap in coal grade quality is expected to bridge completely
► XXXXXX
► XXXXXX
Assured coal supply with 87% coal linkage
Potential for cost saving: Transportation cost to come down.. .. with additional saving from addressing coal slippage
Indicative coal cost workings
www.taxguru.in
Page 40
2.9 Adequate Coal Sourcing
Source: Coal India Limited (CIL)
CIL e-auction bid prices over notified pricesUnallocated quantity of coal
► Details of funds required for the remaining part/incompletepart of the project.
► Funds infused into the project till date.
► Project specification and details of the areas/machinerywhere funds are to be employed for completion of thepower plant.
► PPAs or contracts for the new project after COD.
► Additional revenue and EBITDA which will be generatedafter completion and will be sufficient to service the interestand debt obligations relating to the project.
Project Name XXXX
Project Size XXX MW (X plants with XXX MW Capacity)
Location Enter Location
CoD Enter commercial operation date of all units after fund infusion from XXX date
Project Cost Enter Total Project cost and Project Cost/MW
Source of Funding
Debt: INR XXX Equity: INR XXX
% Completion XX %
Fund infusion required for completion/operation/augmentation of Project 1/2/3…
► Details of funds required for the remaining part/incompletepart of the project.
► Funds infused into the project till date.
► Project specification and details of the areas/machinerywhere funds are to be employed for completion of thepower plant.
► PPAs or contracts for the new project after COD.
► Additional revenue and EBITDA which will be generatedafter completion and will be sufficient to service the interestand debt obligations relating to the project.
Project Name XXXX
Project Size XXX MW (X plants with XXX MW Capacity)
Location Enter Location
CoD Enter commercial operation date of all units after fund infusion from XXX date
Project Cost Enter Total Project cost and Project Cost/MW
Source of Funding
Debt: INR XXX Equity: INR XXX
% Completion XX %
www.taxguru.in
Page 42
Board of Directors
SAMPLE
OperationsVice President
Performance ReviewSenior Manager
Turnkey DivisionVice President
CommercialHead
Costing and MISSenior Manager
AccountsDGM
Supply ChainDGM
Internal AuditSenior Manager
Sales and MarketingSenior Manager
HR and AdminSenior Manager
Company SecretaryQualityHead
Design/ R&DHead
2.11 Organisation Structure
Source: Company Annual Report/ Company Website/ Management Discussions
www.taxguru.in
Page 43
2.12 Board of Directors
Director Brief profile
Person 1
Director► Brief Profile
Person 2
Director► Brief Profile
Person 3
Director► Brief Profile
Person 4
Director► Brief Profile
Person 5
Whole-Time Director► Brief Profile
Source: Company Annual Report/ Company Website/ Company Secretarial Records
2.13 Details of Statutory Approvals and Compliances
➢ Details of all relevant statutory approvals/compliances/licences etc to be furnished including but not limited to:
➢ MOU to be signed with State Government
➢ Pollution Control
➢ Certificate to Operate
➢ CRZ (Coastal Regulation Zone) Clearance
➢ Clearance of detailed design of LNG berth
➢ Chimney Clearance
➢ Registration Certificates
➢ Registration under Tax Authorities
➢ Environmental Clearances
➢ Fire and Safety Clearance
➢ Land acquisition
➢ Details to be furnished to include current status, last renewed date, next renewal date, costs involved, relevant
authority involved priority of approvals etc
Approvals Authority Status
Water allocation Water Resource Department, GoMP Agreement signed on 7 November 20XX for 30 years, allowing for drawing XXX MCM per annum of water from Gopad River.
Consent to establish State Pollution Control Board Obtained on 23 October 20XX
Environment clearance for project land MoEF, GoI Obtained on 25 February 20XX
Forest clearance MoEF Obtained on April 7, 20XX
Civil aviation clearance for chimney height Airport Authority of India Obtained for XXX mt chimney height on 4 September 20XX
Open access for power transmission PGCIL Obtained on 29 July 20XX.
Forest clearance (11 Km) for transmission line MOEF, GoI Obtained in December 20XX
Rail transport clearance for siding at project site Indian Railways Commissioned
Consent to operate MP Pollution Control Board Valid till 31 August 20XX
Boiler Registration/ License Chief Inspector of Boiler State Boiler Inspection Dept.
Boiler 1 – Valid till 27 Feb 20XX
Boiler 2 – Valid till 28 Nov XX
Auxiliary boiler – Valid till 28 Nov 20XX
Permits to Store Petroleum Petroleum and Explosives Safety Organization (PESO) Ministry of Commerce & Industry
Valid till 31 December 20XX
Storage for Compressed Gas Cylinders Petroleum and Explosives Safety Organization (PESO) Ministry of Commerce & Industry
Valid till 31 December 20XX
www.taxguru.in
Page 46
2.14 Investment OverviewK
ey In
vest
me
nts
he
ld
A Ltd.49%
B Ltd.41.1%
E ltd.35.88%
Gs Pvt Ltd. 41.28%D Pvt Ltd.
41.19%
F Ltd.41.34%
G Pvt. Ltd.15.02%
C Pvt Ltd.41.17%
Foreign Subsidiaries
100%
Parent Co. Public
51% 43%
Promoter Shareholding
6%
A Ltd. (Corporate Debtor)
A snapshot of the Key Investments held by the corporate debtors can be given as shown below:
Source: Company Annual Report/ Company Website/ Company Secretarial Records
www.taxguru.in
Page 47
Facilities:
A list of the key units of the entity, sector and sub sector.Sample format given:
2.14 Investment 1/2/3…
Description of each Investment of the corporate debtor can be given highlighting the following aspects of each investment:
Category
Renewable/ Non-
renewable
Service
_____
Transmission
• Product names
• Product name
Applications • Final Application
Business Description:
Give a brief description of the business of the entity with detailssuch as nature of business, plants or office location, financialdetails or a snapshot of the financials of the entity, date ofinvestment in the entity, status of operations, etc.
Key Affiliations:
A list of the key agreements of the entity, capacity wise andlocation of plant wise, if applicable.
For Example: Logos of the comapanies
Headcount (as of 31st March, 2018)- XXX Land Area (in acres)- XXX
• Brief description of the unit and the capacity and overall level of capacity utilization in the past
• Components of Plant’s Core shop includes equipments like: List of equipment at the core shop
Plant details
Plant 1- XXX, XXX
www.taxguru.in
Page 48
Industry Overview
www.taxguru.in
Page 49
❑ Nature of industry
❑ Concise overview of the industry should include its competitors and their operations.
❑ Industry growth trend in the past and future outlook of the industry
❑ Macroeconomic factors affecting the industry
❑ Change in laws and regulations governing the industry (Favourable or not)
❑ Highlight factors like geographical growth, consumer base, price fluctuations, past performances and income projections.
❑ Sector wise break up of customers into Private/State Government/Central Government, etc.
❑ Key Investment perks in the industry
❑ Seasonality/Business Cycle of the Industry.
3. Industry Overview
Detailed Industry analysis to be furnished and the following points can be considered for the same:
www.taxguru.in
Page 50
Installed capacity (314,642 MW)
Capacity addition
has accelerated in
the last five year
plan (2008-12)
As against a target
capacity addition
of 88,500 MW in
12th FYP, 93,535
MW have been
added as on
January 2017
Capacity Additions picking up pace…
3.1 Snapshot
Private sector participation has increased significantly and is expected to play important role in future capacity addition
22.230.5
40.2 41.1
62.4
88.5
21.4 16.4 19.1 21.2
55.0
93.5
7th Plan 8th Plan 9th Plan 10th Plan 11th plan 12th Plan
• Electricity Act, 2003: Created a conducive, regulatory framework for private sector participation
• Ministry of Power/CEA/CERC/SERC# : Cleary defined roles• Appellate Tribunal for Electricity for quick resolution of
disputes• Transparent and well evolved bidding mechanism• Well developed short term power market with 2 exchanges
and multiple traders
Dedicated large financing
institutions PFC and REC
*The Per Capita Consumption for India is provisional as in FY 17, for other Countries it is as on 2014
The per-capita electricity consumption of India stood at XX kWh in FYXX, still far behind as compared to global average. India’s per capita consumption is lowest among the BRICS.
# SERC – State Electricity Regulatory CommissionCERC – Central Electricity Regulatory Commission
3.2 Strong Sector Fundamentals
Power sector has emerged an attractive investment destination for Private Sector
www.taxguru.in
Page 52
► Detailed PESTLE (Political,
Economic, Sociological,
Technological, Legal and
Environmental) analysis of the
Indian market
► Market dynamics
► Market definition and
segments
► Market size
► Market growth
► Customers
► Customer segments
► Key purchasing criteria
► Purchasing decision process
Industry attractiveness
High-level Quantitative Country
ScreenIndia’s power sector industry analysis
India’s overall regulatory and market
policy
Industry analysis
► Review of National Electricity Plan and other
demand indicators
► Past growth trend and correlation with GDP
► Point of view on estimated growth for five years
Analysis of Storage, Ancillary and EV segments
► A deep dived analysis to quantitatively assess
the technologies based on:
► Estimated size of market and growth rate
► Demand-supply landscaping
► Existing projects
Benchmarking
► Comparison of India’s market potential against
key regions in Europe and Americas
► Use cases analysis for the technologies in
different regions
Regulatory evolution
► Assessment of Government’s
initiatives on Storage, EV and
charging infrastructure segments
► Established regulatory frameworks
and clear guidelines for developing
the sector agenda
► Analysis of mechanisms in place to
drive investments into new
infrastructure build-out
Tools/ Enablers
► India’s National Electricity Plan
► State wise demand database
► XYZ subscribed tools and databases: Business Monitor Online (BMO), Bloomberg New Energy Finance, Navigant
Research, World Energy Outlook
► Power demand and supply data for past 5 years and future projections
► Pricing and market information from publically available sources
3.3 Key Growth driverswww.taxguru.in
Page 53
Project cost lower than peers : Significant advantage on capacity charges ensuring tariff competitiveness
INR Cr/MW
4.04 4.346.67
5.886.19
6.667.15 7.21
Anpara TPP Tamnar I Amarkantak I Derang TPP AdhunikPower
Annupur TPP Bina Uchpinda TPP
Project Developer
JharkhandMadhya Pradesh
OdishaProject Location
Project Capacity (MW)
XXX XXX XXX XXX XX XXXX(1)
Madhya Pradesh
Chhattisgarh
(1) 720 MW operational
Source: Credit rating reports/ news articles/company information
UP Chhattisgarh
XXX XX
Chhattisgarh
3.4 Competitor Analysiswww.taxguru.in
Page 54
Competitor Analysis for a particular Financial Year to be given (Sample given below)
3.4 Competitor Analysis
1469
1127
281
878716
579
29815% 16% 11% 19% 12% 12% 25%-71%
8.1%15%
2% 3%
6%
11.5%
-80%-70%-60%-50%-40%-30%-20%-10%0%10%20%
0200400600800
1000120014001600
Sales (In RsCrore)
EBITDAMargin
Net Margin
Source: CRISIL/ICRA report or Specific industry reports from SIAM, NHAI, S&P, Capital IQ, etc
Power Generation capacity of all competitors to be given (Sample given below)
217786
150000
40000
150000
30000
150000
48000
0
50000
100000
150000
200000
250000
Chart -10
Source: CRISIL/ICRA report or Specific industry reports from SIAM, NHAI, S&P, Capital IQ, etc
➢ Apart from this analysis, we have to look at a product wise analysis of each competitor
➢ Mention the latest deals, mergers or acquisitions that have taken place amongst the competitors
Observations/ Comments:
➢ Top 3 players Account for ~XX% of the Total Industries’ Revenue
➢ The Industry Leader is ABC with a top line of XX Cr and EBITDA margin of XX%
➢ Key emerging players are – XYZ, MNO, etc.
➢ XXXX
Chart -9
Capacity (MW)
www.taxguru.in
Page 55
Disruption
Growth of smart grids and smart cities
Smart grid market in India to increase from US$1.2bn in 2015 to US$--- by 2025 (CAGR: 33%)
Technical advancementsRising focus on new ways of enterprise asset Management, HVDC lines, better load forecast and automation
Interest from institutional and private investors leading to M&A
Buyers focus on entering the industry through acquisition of operating assets to avoid construction risks
Growing interest from investorsOf the 33 solar parks, PowerGrid will build transmission for only 6 parks and rest will be tendered
Impetus on renewables
T&D infrastructure investments for evacuating the increasing renewables
High T&D lossesT&D losses in India at 22%
Lack of a resilient grid
Grid breakdown in 2012, and poor rural electrification
Absence of a grid storage system
Resulted in lack of flexibility in supply to meet the increase in electricity demand
Regulatory hurdles and Right of Way
Inability to acquire land and get timely clearances have impacted 120 projects
Delay in project execution
Five to six years of execution in India is much longer than global standards
3.5 Key Trends and Outlookwww.taxguru.in
Page 56
Projected Business Plan - Aspirational
www.taxguru.in
Page 57
PPA mix
1100 MW
► Evaluation of project to be done
assuming no Compensatory tariff
► Company has received Comp.
tariff in the past – between Dec 15
to Dec 16 (INR 499 crores + 0.226
INR/kWh)
► Currently, matter is subject to
UPERC tariff order – expected in 3-
4 weeks.
100 MW
► PPA with TN at INR 5/unit expired
in Jan’17
► Extension of PPA awaited for
another 2 year at INR 3.5/unit (1.5
fixed + 2 escalable annually)#
► PPA expected by Sep’17
► Current power sold on merchant
basis
1
Future expansion
► Future capacity expansion at
attractive location
► Coal transportation dynamics
already in place
► PPA approved for 90% of
generation capacity
► Attractive for developers looking
for further expansion opportunity
2
Refinancing
► Offtake risk significantly mitigated
allowing for project refinancing at
attractive terms in a softening
interest rate market
► Refinancing supposed to extend
debt term to FY33
► Lead lender: REC
► Opportunity for interest rate
reduction
3
1,200
2,520
Current Potential
Expansion potential at siteCapacity in MW
~2x 13.7%10.5%
Current Going Ahead
Expected interest rate reduction
4.1 Future growth strategy
• Distribution in accordance to Gross Capacity at Project bus bar
** Gross capacity tied up
# The company planned to undertake this PPA for only 6 months and then sign a long term PPA with the discom at INR 2 / kWh fixed charge and actual cost of generation as variable charge
Coal cost reduction
Transportation cost
► Currently 80% of the coal is
transported through road and just
20% by MGR
► With the construction of new silo,
entire coal from XXX mine will be
transported through MGT
resulting in cost reduction of INR
400 / ton
Addressing coal slippage
► Plant is billed assuming grade G8
coal, however, grade G13 quality
coal has been supplied
► This results in a ROM price gap of
INR 700/ton
► On CIMFR recommendation:
► In the last 3-6 months, billing
difference is being reimbursed
► Grade quality of coal is expected
to bridge completely
4
www.taxguru.in
Page 58
4.2 Assumptions
Key assumption taken for the forecast:
➢ Fund infusion (Working capital/Term loan/Equity) for achieving the projected PLF and capex requirement.➢ Factors considered while projecting- Market share growth, PPAs , Average cost of generation of power per unit.➢ Fixed and variable component of PPA as per concession agreement➢ Basis of cost of auxiliary consumption➢ Consumption of fly ash and secondary fuel➢ Assumption for demand in the forecast period - how it will increase/decrease, based on historical trend or industry reports.➢ Assumptions used for other expenses:
• Plant Overheads• Bifurcation into fixed, variable and semi variable• Employee benefit expenses• Indirect Costs• Other expenses
➢ Assumptions for Management Expertise and Adequate Capitalisation.➢ Listing reports which are relied on for the following:
• Industry growth rate assumptions;• Average Selling Price in the forecast period;• Average Cost Price in the forecast period;• Market Share, • Inflation, etc
• Working capital assumptions
www.taxguru.in
Page 59
4.3 Profit & Loss for the Forecast Period
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Sales turnover XXX XXX XXX XXX XXX
Other Operating Income XXX XXX XXX XXX XXX
Aggregate Revenue XXX XXX XXX XXX XXX
Cost of Power Purchased XXX XXX XXX XXX XXX
Cost of Fuel XXX XXX XXX XXX XXX
Transmission Charges
Employee benefits expense XXX XXX XXX XXX XXX
Plant overheads XXX XXX XXX XXX XXX
Other SG&A XXX XXX XXX XXX XXX
Total Expenses XXX XXX XXX XXX XXX
EBITDA XXX XXX XXX XXX XXX
Observations/Commentary: (Commentary on Key Observations should be given as follows)
➢ The above projections have been made assuming the utilisation of idle capacity. Hence, we can see growth in revenue and EBITDA levels.
➢ Overheads are decreasing constantly basis our understanding of the efficiency in the production processes and economies of scale. Sufficient demand for the product line is present.
➢ XXXXXX➢ XXXXXX➢ XXXXXX
Source: Company Industry Report/ Company Website/ Management Discussions
www.taxguru.in
Page 60
4.4 Company level EBITDA Analysis over the Forecast Period
Administrative expenses as % of revenue
EBITDA
Fuel cost as a % of revenue
3.8% 3.8% 3.6% 3.3% 3.0% 2.8%
50.0%52.0%
53.0%51.0%
50.0%48.0%
► [COMMENTARY]
Operating expenses as a % of revenue
13.0% 13.0%
13.2%13.1%
12.8% 12.8%
This type of EBITDA analysis can be shown with commentary on the right
20.2% 20.3% 20.4%21.0% 21.6% 21.9%
Year 1 Year 2 Year 3 Year 4 Year 5
Source: Company Industry Report/ Company Website/ Management Discussions
www.taxguru.in
Page 61
Annexures
Serial Number Details
Annexure 1 Process Overview
Annexure 2 Bid Evaluation Criteria
Annexure 3 Public Announcement
Annexure 4 Expression of Interest
Annexure 5 Claims of Various Creditors
Annexure 6 Details of Key Investments
Annexure 7 Process Note
www.taxguru.in
Page 62
Process Overview
www.taxguru.in
Page 63
Background and Initiation of CIRP Proceedings underNCLT:
❑ Date of admission in NCLT
❑ Name of Interim Resolution Professional
❑ Name of Process Advisors & Legal Counsel
❑ Name of Valuers Appointed
❑ Summary of claims Filed & Admitted
❑ Brief summary of Flow of events post initiation ofCIRP
Process Overview
Brief profile of Insolvency Resolution Professional (IRP):
❑ Professional background of the IRP – Highlight thecurrent occupation and designation in theindustry or professional firm. EducationalQualification and number of years of experiencein different organisations or in practice.
❑ Select Experience of the IRP – Highlight theongoing engagements and engagements done inthe past to show how that experience will help.
EOI Invitation under NCLT:
❑ Date on which EOIs were invited
❑ EOIs received under the NCLT process
❑ EOIs accepted after the last date of submission ofEOIs
❑ Tabular summary of EOIs received, their status aseligible to bid or not and whether they arestrategic investors or financial investors.
Binding Financial Bid/Binding Resolution Plan:
❑ Last Date of submission of Binding Financial Bid
❑ Summary of Binding Financial Bids received
❑ Last Date of submission of Binding Resolution Plan
❑ Date of discussion of plans with the COC.
❑ Details of Negotiations with highest evaluatedbidder
❑ Name of the applicant selected as successfulresolution applicant
www.taxguru.in
Page 64
Indicative Reference List
► Financial snapshot and historical numbers to be used for analysis can be obtained from company annual reports and / or audited financials of the corporate debtor
► Discussions with management / KMPs of the corporate debtor to get data of ongoing PPAs or upcoming bids, other revenue sources, how the FSAs are placed
► CERC reports/power ministry papers, circulars to be referenced for performance statistics, key trends, future outlook of the power sector in terms of tariffs / rate per unit of power generating companies, key developments, Competitor analysis, upcoming tenders etc
► Institutional / Government Publications to be referenced for policy updates and key statistics
► Industry reports from various credit rating agencies can be referenced especially when the agency is initiating coverage on a particular Industry/Company
► News in the media to be referenced for recent developments in the company/industry
www.taxguru.in
1
Annexure-B
SPECIMEN
OF
EVALUATION MATRIX
www.taxguru.in
2
Broad framework for Evaluation Matrix
The following proposed framework for Evaluation Matrix would help in the selection of the successful Resolution applicant.
Criterion No.
Evaluation Criteria Remarks Marks
Part A : Quantitative Parameters 1. NPV of all payments to
FCs, to be made by the Resolution Applicant within 1 year from NCLT Approval Date.1
In order to make the assessment objective, all the payments promised to be made to FCs by the RA within a period of 1 year shall be considered as being made by the RA through own sources and we shall compute the NPV as on NCLT approval date for all such payments.
20
2. NPV of all payments made to all creditors other than FCs
Most Resolution Plans that have been approved are more favorable to FCs as compared to OCs. For the purpose of evaluation, payments made to creditors other than FCs need to be given separate weightage.
Marks for this category to be
allocated in proportion to
the Claims %age subject to a
minimum of 5 marks and
maximum of 10 marks
3 NPV of all payments to
be made to FCs
This shall include computation of NPV, as on NCLT approval date, for all payments proposed to be made by the RA over the term of the Plan
[35 – Marks allotted for A.2
above]
4 Upfront payment Rather than making it Evaluation Criteria, Evaluation Matrix should include some minimum threshold of upfront payment (such as 20/30% of the total NPV computed in A.3 above, as per the Plan, to be in the form of Upfront Cash). This threshold should be defined on a case-to-case basis depending on the interest in the Corporate Debtor. Upfront Cash can be defined as the payment proposed
Nil
1 This will include money proposed to be raised by the RA on the strength of Balance Sheet of the Corporate Debtor from new set of lenders
www.taxguru.in
3
to be made to FCs within a period of [30-60] days from NCLT approval date.
5 Equity upside This refers to the outstanding debt converted to equity. In our view, a transparent view of computing equity value should be communicated. It is proposed that computing the value of equity upside can be linked to the fair value computed by the valuer appointed by the RP.
5
6 Fresh equity infusion
for improving
operations
This certainly has its value in ensuring that the right amount of capital is infused in the Company for running of the operations.
10
Part B : Qualitative Parameters 6 Reasonableness of
financial projections/
Eventuality of
honoring proposed
commitment
This parameter shall be divided into 2 sub-parameters
a) Reasonableness of financial projections (5 marks)
b) Conditions precedent to the implementation of the Resolution Plan (5 marks)
Sub-parameter (a) above shall only be assessed for the plans which have a deferred payment spanning more than 1 year. For plans where the entire payment is to be received within 1 year shall be awarded full marks on sub-parameter (a). For sub-parameter (b), an assessment needs to be made of various Conditions Precedent (“CPs”) proposed by the RA for the implementation of the Resolution Plan. Process Advisor / CoC needs to review the list of CPs and then accordingly allot marks. Higher the number of CPs lower the marks.
10
7 Ability to turnaround
distressed companies -
Managerial
competence and
Clear guidelines should be provided to RA for the documentation to be submitted for evaluation of this criterion.
10
www.taxguru.in
4
technical abilities, key
managerial personnel,
track record in
implementing
turnaround of stressed
assets, etc.
8 Standing of RA/
Financial discipline
Same as above such and may include credit rating, revenue, collateral and record of financial discipline
10
www.taxguru.in
5
DETAILED EVALUATION MATRIX
• The Resolution Plans shall be evaluated after considering a defined set of quantitative as well qualitative parameters (detailed below). The weightage to be assigned to the 2 category of parameters shall be as follows:
S. No. Section Marks
Part A Quantitative Parameters 70
Part B Qualitative Parameters 30
Total 100
PART-A – Quantitative Parameters (Total 70 marks)
• The evaluation of Resolution Plan under this category will be with the objective of ascertaining the commercial attractiveness of the
Resolution Plan.
• The key quantitative parameters that shall be considered for the purpose of evaluation are as follows:
S. No. Section Marks Description Scoring Methodology
A.1 NPV of all payments to FCs, proposed to be made by the Resolution Applicant within 1 year from NCLT Approval Date.
20 This shall be computed by discounting the future cash flows to be paid to financial creditors within 1 year from the NCLT Approval Date by following a tiered discounting rate. The discounting rate shall vary depending on the age bucket in which the cash flow falls. The age buckets that shall be considered are as follows:
• 0-5 years: 8%
• >5 years up to 10 years: 10%
• >10 years up to 15 years: 15%
• > 15 years: 30%
The scoring shall be linked to the Resolution Debt of the Corporate Debtor. If NPV computed is
o > = 35% of the Resolution Debt – 20.0 marks
o <35% of the Resolution Debt, then marks shall be based on linear interpolation between 0 and 20 marks
www.taxguru.in
6
S. No. Section Marks Description Scoring Methodology
A.2 NPV of all payments made to all creditors other than FCs
Marks for this category
to be allocated in
proportion to the Claims
%age subject to a
minimum of 5 marks and maximum of
10 marks
This shall be computed by discounting the future cash flows to be paid to all creditors (other than FCs) by following a tiered discounting rate. The discounting rate shall vary depending on the age bucket in which the cash flow falls. The age buckets that shall be considered are as follows:
• 0-5 years: 8%
• >5 years up to 10 years: 10%
• >10 years up to 15 years: 15%
• > 15 years: 30%
The scoring shall be linked to the Resolution Debt of the Corporate Debtor:
o For the RA giving highest %age of the Resolution Debt as NPV – full marks
o For all other RAs, the score shall be proportionately reduced
A.3 NPV of all payments to be made to FCs
35 – Marks allocated for
A.2 above
This shall be computed by discounting all the future cash flows to be paid to financial creditors by following a tiered discounting rate. The discounting rate shall vary depending on the age bucket in which the cash flow falls. The age buckets that shall be considered are as follows:
• 0-5 years: 8%
• >5 years up to 10 years: 10%
• >10 years up to 15 years: 15%
• > 15 years: 30%
The scoring shall be linked to the Resolution Debt of the Corporate Debtor:
o For the RA giving highest %age of the Resolution Debt as NPV – full marks
o For all other RAs, the score shall be proportionately reduced
A.4 Equity Upside for the financial creditors
5 This shall be computed based upon the Fair Value of Corporate Debtor computed by the valuer appointed by the RP and factoring the extent of shareholding proposed to be offered to financial creditors
The scoring shall be linked to the Resolution Debt of the Corporate Debtor:
o For the RA giving highest %age of the Resolution Debt as NPV – full marks
www.taxguru.in
7
S. No. Section Marks Description Scoring Methodology
o For all other RAs, the score shall be proportionately reduced
A.5 Equity / Quasi-equity infusion for improvement of business operations For the parameter to be considered in scoring, the RA has to clearly provide all the details relating to the sources of available funds being used for the proposed equity /quasi-equity infusion In case of a One Time Settlement (“OTS”), the RA’s score shall be rescaled to 70 marks, basis the marks obtained in parameters from A.1 to A.4
10 This shall be computed as the actual cash proposed to be infused by the RA in the Corporate Debtor for improvement of business operations in the form of Equity or Quasi-Equity within first 6 months from the NCLT Approval date plus discounted cash flows for infusion beyond 6 months, but up to 3 years, at a discount rate of 8% p.a. If the infusion is beyond 3 years, it will not be considered for scoring purposes. Equity shall be defined as investment by way of Common Shares. Quasi equity shall mean fund infusion by RA in the form of instruments, other than common shares, which meet the following criteria:
• Sub-ordinate to the secured loans
• Interest shall be cumulative but not paid before secured lenders are repaid fully
• No redemption without the consent of secured lenders
Total marks 70
www.taxguru.in
8
PART-B – Qualitative Parameters (Total 30 marks)
• The evaluation of Resolution Plan under this category will be with the objective of ascertaining the qualitative aspects of the
Resolution Plan / Resolution Applicant.
• For the parameters pertaining to the Resolution Applicant, we shall consider the entity that is designated as the Resolution Applicant or in case the Resolution Applicant is a Special Purpose Vehicle (“SPV”) we shall consider the parameters pertaining to
the largest shareholder in the SPV
• The key qualitative parameters that shall be considered for the purpose of evaluation are as follows:
S. No.
Section Marks Description Scoring Methodology
B.1 Reasonableness of financial projections/ Eventuality of honoring proposed commitment
10 This shall refer to reasonableness of assumptions in the business plan submitted by the RA and assessment of risks and mitigations related to implementation of the Resolution Plan The analysis shall be made of assumptions with respect to, but not limited to, revenue growth rate, gross margin, asset turnover ratio and net working capital.
• CoC advisor / Process Advisor shall present analysis of reasonableness of financial projections on items such as revenue growth, profitability, market share, per unit pricing etc., by using benchmarks available in the public domain or financial projections used by valuer to arrive at fair value, if available
• A key parameter related to “eventuality of honouring proposed commitment” is the conditions precedent (CPs) submitted as a part of the plan. The fewer the number and higher the simplicity of the CPs, the higher the likelihood of the plan reaching successful closure.
www.taxguru.in
9
S. No.
Section Marks Description Scoring Methodology
• Each CoC member shall award marks on this criterion for this post presentation of our analysis.
The weighted average as per vote share shall yield the final score for this parameter.
B.2 Ability to turnaround distressed companies – Managerial competence and technical capabilities, key managerial personnel, track record in implementing turnaround of stressed assets
10
B.2a Track record / Experience of the Resolution Applicant
5 This shall refer to the years of operating experience that the RA has in the sector In case of a RA who is financial investor, the assessment shall be made based on the entities in which RA has a management control
Marks will be given on a scale of 5 marks based upon experience of the RA and the scale of the operations of the RA
www.taxguru.in
10
S. No.
Section Marks Description Scoring Methodology
B.2b Track record in M&A / taking over and turning around distressed assets
5 This shall refer to evaluating RA’s track record in undertaking corporate M&A and acquiring and turning around distressed assets
Marks will be given on a scale of 2.5 based upon M&A / turnaround track record of the RA. Successful turnaround could be evaluated based on RoI, improvement in key metrics, ratio of repayment of debt etc. post acquisition.
B.3 Standing of Bidder / External Rating / adherence to financial Discipline / record of regulatory compliance [the score will be 0, if the RA, including any Group Company is NPA <12 months]
10
B.3a External Credit Rating (“ECR”)
4 This shall refer to the credit rating assigned by an accredited credit rating agency, to the fund-based facilities availed by the RA. The credit rating report should have been issued within the last 15 months from the date of submission of the Resolution Plan for the ECR to be valid for evaluation purpose.
Marking will be as follows (including ‘+’ and ‘–‘ of the ratings assigned) :
2 This shall refer to consolidated turnover/ Assets Under Management as per RA’s latest audited and consolidated Income Statement / Balance Sheet
The score shall be arrived basis a relative scoring as under : Full marks would be awarded to the maximum value amongst the RA, within the broad group, viz, Strategic RA and Financial RA, with other RAs being scored proportionately on a continuous scale.
B.3c Collateral (Guarantees/ Pledge of Shares)
2 This shall refer to the security package / collateral proposed to be offered by the RA as per its Resolution Plan
The scoring under this parameter will be determined based on the assessment of quality of the security package / collateral being offered. In case of an OTS, this factor shall not be applicable and scoring would be rescaled accordingly.
B.3d Adherence to financial Discipline / Record of regulatory compliance
2 This shall refer to the CIBIL score, CRILC data, details captured in ABS and data available in the public domain pertaining to the RA.
The scoring under this parameter will be determined based on level of adherence to financial discipline and record of regulatory compliance based upon CIBIL score, CRILC data, details captured in ABS and data available in the public domain.
Other things to be noted include:
1. Maximum terms of repayment should also be defined while giving instructions to the Resolution Applicants – such as 5/ 10 years, depending
upon the case.
www.taxguru.in
12
2. Scoring on qualitative criteria should be undertaken before the detailed evaluation of quantitative criteria so as not to influence the scoring
of qualitative parameters.
Keeping in mind the above issues and perspectives, it can be concluded that the Evaluation Matrix may, as per current norms, continue to be framed
by the CoC and the Process Advisor. However, the Matrix should attempt to ensure equitable treatment of all stakeholders. Making scoring agnostic
to the creditor receiving the monies may help achieve this. Additionally, another advantage of implementing the above framework would be that
serious players who bring in a significant amount of their own capital would have a greater chance of emerging successful in the process, as compared
to those who rely only on the cash flows of the Corporate Debtor.
www.taxguru.in
Page 1 of 63
Annexure-C
SPECIMEN
OF
REQUEST FOR RESOLUTION PLANS (RFRP)
FOR SELECTION OF A RESOLUTION PLAN FOR [NAME OF
THE CORPORATE DEBTOR]
Date: [Date of issue of request for resolution plans]
[Issued by the Resolution Professional of [Name of the Corporate Debtor],
in consultation with the CoC and pursuant to the approval of the CoC
www.taxguru.in
2
DISCLAIMER
This RFRP is issued by the Resolution Professional(RP), in consultation with the CoC and pursuant to the
approval of the CoC vide voting dated [Date of voting results] pursuant to meeting dated [Date of the CoC
meeting], for general information purposes, without regard to specific objectives, suitability, financial
situations and the requirements of any particular person, and does not constitute any recommendation of an
offer to buy, purchase or subscribe to any securities mentioned therein. Neither this document nor anything
contained herein, or anything contained in the Information Memorandum or provided in the Data Room, shall
form the basis of, or be relied upon in connection with any contract, agreement, undertaking, understanding
or any commitment whatsoever. This document does not solicit any action based on the material contained
herein. Nothing in this RFRP, materials relating to the RFRP, or the opinions, if any contained in this RFRP
or the Information Memorandum or the Data Room is intended to be construed as legal, accounting or tax
advice by the Resolution Professional or the members of the committee of creditors of the Corporate Debtor.
This disclaimer applies to this RFRP, and any information disclosed by the Resolution Professional or
Resolution Process Advisors, or the members of the Committee of Creditors (CoC) of [Name of the Corporate
Debtor]. It is clarified as a matter of abundant caution that only a Resolution Applicant(s) can submit a
resolution plan pursuant to and subject to the terms and conditions of this RFRP.
This RFRP cannot be assigned or transferred in any manner whatsoever to any person other than the intended
Resolution Applicant(s). This document has been issued by the Resolution Professional, in consultation with
the CoC and pursuant to the approval of the CoC vide voting dated [Date of voting results] pursuant to meeting
dated [Date of the CoC meeting], to set out the process for selection of Resolution Plan.
The information pertaining to the past performance of Corporate Debtor is not a guide for future performance.
Forward-looking statements are not predictions and may be subject to change without notice. Actual results
may differ materially from the forward-looking statements due to various factors. No statement, fact,
information (whether current or historical) or opinion contained herein should be construed as a
representation or warranty, express or implied, of Resolution Professional, Resolution Process Advisors,
Corporate Debtor or the members of CoC; and none of the Resolution Professional, Resolution Process
Advisors, Corporate Debtor, the members of the CoC, or any other Persons/entities shall be held liable for the
authenticity, correctness or completeness of any such statements, facts or opinions. This RFRP has not been
approved and will or may not be reviewed or approved by any statutory or regulatory authority in India or by
any stock exchange in India or any other jurisdiction. This document may not be all inclusive and may not
contain all of the information that the recipient may consider material. Each Resolution Applicant(s) should,
conduct its own investigations, diligence, and analysis and should check the accuracy, adequacy, correctness,
reliability and completeness of the assumptions, assessments, statements and information contained in this
document and obtain independent advice from appropriate sources.
This RFRP and information contained herein or disclosed pursuant to the terms of this document or any part
of such information do not constitute or purport to constitute any advice or information in publicly accessible
media and should not be printed, reproduced, transmitted, sold, distributed or published by the recipient
without prior written approval from the CoC. Distributing or taking / sending / dispatching / transmitting this
RFRP in certain foreign jurisdictions may be restricted by law, and Persons into whose possession this
document comes should inform themselves about, and observe, any such restrictions. Neither the Resolution
Professional, Resolution Process Advisors, the members of the CoC, Affiliates(defined hereinafter), directors,
employees, agents or representatives shall be liable for any damages, whether direct or indirect, incidental,
www.taxguru.in
3
special or consequential including loss of revenue or profits that may arise from or in connection with the use
of this document or due to participating in the Resolution Plan Process (defined hereinafter), including for the
Resolution Applicant(s) not being selected as the Successful Resolution Applicant(s) (defined hereinafter) or
on account of any decision taken by the members of the CoC in connection with or pursuant to the Resolution
Plan Process.
By accepting a copy of this document, the recipient accepts the terms of this disclaimer notice, which forms an
integral part of this document. Further, no Person (including the Resolution Applicant(s)) shall be entitled
under any law, statute, rules or regulations or tort, principles of restitution or unjust enrichment or otherwise
to claim for any loss, damage, cost or expense which may arise from or be incurred or suffered on account of
anything contained in this document or otherwise, including the accuracy, adequacy, authenticity, correctness,
completeness or reliability of the information or opinions contained in this document and any assessment,
assumption, statement or information contained therein or deemed to form part of this document, and
Resolution Professional, Resolution Process Advisors, Corporate Debtor, members of CoC, Affiliates,
directors, employees, agents and representatives do not have any responsibility or liability for any such
information or opinions and therefore, any liability or responsibility is expressly disclaimed.
The CoC may in its absolute discretion, but without being under any obligation to do so, update, amend or
supplement the information, assessment or assumptions contained in this document. Further, the Resolution
Applicant(s) must specifically note that the CoC reserves the right to change, update, amend, supplement,
modify, add to, delay or otherwise annul or cease the Resolution Plan Process at any point in time, for any
reason determined in their sole discretion in accordance with the Insolvency and Bankruptcy Code, 2016
(IBC).
The issue of this document does not imply that the members of CoC are bound to select a Resolution
Applicant(s) as a Successful Resolution Applicant(s) in respect of its Resolution Plan and the members of CoC
reserve the right to reject at any stage all or any of the Resolution Applicant(s) or Resolution Plans without
assigning any reason whatsoever.
Each Resolution Applicant(s) shall bear all its costs associated with or relating to the preparation and
submission of any documents (including the Resolution Plan) pursuant to this RFRP, including but not limited
to preparation, copying, postage, delivery fees, expenses associated with any demonstrations or presentations
which may be required by the Resolution Professional or the CoC and any other costs incurred in connection
with or relating to its Resolution Plan.
The Resolution Applicant(s) are prohibited from giving or offering any gift, bribe or inducement and any
attempt to any such act on behalf of the Resolution Applicant(s) towards the Resolution Professional or
Resolution Process Advisors, the members of the CoC, Affiliates, directors, employees, agents or
representatives for showing any favor in relation to this document or the process set out herein, shall render
the Resolution Applicant(s) to such liability and penalty as the CoC may deem proper, including but not limited
to immediate disqualification and exclusion from the Resolution Process contemplated hereunder. Neither the
information in this RFRP nor any other written or oral information provided by the members of the CoC, its
employees is intended to form the basis of or the inducement for submission of any document or information
or the Resolution Plan by any Resolution Applicant(s) or for any investment activity or any decision to enter
into any Definitive Agreements.
www.taxguru.in
4
This RFRP contains confidential, proprietary and / or legally privileged information and must be kept
confidential by the recipient. By accepting a copy of this document (whether by receipt of an electronic copy
of the RFRP or access to the Data Room pursuant to the terms of this RFRP or otherwise) (“Acceptance”),
the recipient accepts the terms of this disclaimer notice, which forms an integral part of this document. The
recipient should not use this RFRP, the Information Memorandum, any other document annexed herewith
and/or otherwise provided for any other purpose other than for the preparation of the Resolution Plan.
Further, no representation or warranty, expressed or implied, is made or given by or on behalf of any person
as to the accuracy, authenticity, completeness, or fairness of the information or opinions contained in this
RFRP and Acceptance of the RFRP by the Resolution Applicant(s) shall be deemed to be an unconditional
acknowledgement by the Resolution Applicant(s) that the Corporate Debtor, the Committee of Creditors, the
Resolution Professional, Resolution Process Advisors do not accept any responsibility or liability for any
information in the RFRP or the Information Memorandum.
While the data/ information provided in this RFRP or the Data Room, has been prepared and provided in
good faith, , the Resolution Professional or Resolution Process Advisors, the members of CoC have verified
such information to the best of their ability and shall not accept any responsibility or liability whatsoever in
respect of any statements or omissions herein, or of the accuracy, correctness, completeness or reliability of
information in the RFRP or the Data Room, or incur any liability under any law, statute, rules or regulations,
even if any loss or damage is caused to any of the Resolution Applicant(s) by any act or omission on their part.
The Resolution Applicant(s) is required to make its own assessments of the information provided in the
Information Memorandum or the Data Room.
In no circumstances may the Resolution Applicant(s) or their officers, employees, agents and professional
advisers make contact with the employees, customers, agents or suppliers of the Corporate Debtor until
permission to do so is given in writing by Resolution Professional.
Recipient who decides not to pursue this matter are required to return this document and any copies thereof
(together with any other material relating to the Corporate Debtor which may have been provided by or on
behalf the Corporate Debtor), as soon as practicable, to the Resolution Professional.
The benefit of all disclaimers, confirmations, acceptances and representations made or accepted by the
recipient in this RFRP shall accrue to the benefit of the Corporate Debtor, its directors, officers, employees,
advisors and other such persons assisting the Company in relation to its CIRP, the Committee of Creditors,
their directors, officers, employees and advisors and the Resolution Professional, Resolution Process
Advisors its authorized representatives, directors, officers, employees and advisors.
Nothing contained in this RFRP shall be deemed to relieve, wholly or partially, directly or indirectly, the
Resolution Applicant(s) from their compliance with the IBC, any other law in force, and/ or any instrument
having the force of law, as may be applicable to them.
The Resolution Applicant(s) shall inform themselves concerning, and shall observe and comply with, any
applicable legal requirements.
The laws of the Republic of India are applicable to this RFRP.
www.taxguru.in
5
PART I – PARTICIPATION
Introduction
➢ Brief introduction about the Corporate Debtor
➢ Details of the Corporate Insolvency Resolution Process
• Name of the Adjudicating Authority and the Bench announcing the order
• Date of the order
• Name of the RP appointed
➢ Details of the Insolvency Resolution Professional/Resolution Professional
• Name of the RP
• IBBI registration details of the RP
• Address of the RP
➢ Reference to provision of the Insolvency and Bankruptcy Code, 2016 mentioning the powers of the boards
and duties and powers of the RP as the case may be
➢ Details of the Resolution Process Advisor, if any.
➢ Reference to provisions relating to Expression of Interest and its details.
This RFRP has been issued by the RP, in consultation with the CoC and pursuant to the approval of the CoC
vide voting dated [Date of voting results] pursuant to meeting dated [Date of the CoC meeting], to the
Resolution Applicant(s) inviting them to participate in the Resolution Plan Process.
www.taxguru.in
6
Definitions
Unless the context otherwise require, following capitalized terms used in this RFRP, shall have the
meaning hereunder. Terms not defined in this RFRP shall have the meaning assigned to terms under the
IBC and the CIRP Regulations:
[Note: The terms defined below are not exclusive and can be extended and/or appended to define more terms if
(To be executed on non-judicial stamp paper of appropriate stamp duty value relevant to place of execution)
In light of the Resolution Plan for (Name of the Corporate Debtor) submitted by ……………………..[Insert
name of the Resolution Applicant(s) with address] and as per the provisions of the RFRP dated [●], issued by
the Resolution Professional, in consultation with the CoC and pursuant to the approval of the CoC vide voting
dated [Date of voting results] pursuant to meeting dated [Date of the CoC meeting], and any other required
RFRPs, the ………………………………. [Insert name and address of the bank issuing the guarantee and
address of the head office] (“Guarantor Bank”) hereby agrees unequivocally, irrevocably and unconditionally
to pay to _________ Bank, having its office at _____________(hereinafter referred to as “the Bank”) forthwith
on demand in writing from the Bank or any officer authorised by it in this behalf, any amount up to and not
exceeding Rs. ………………. (Rupees ………………. only) on behalf of M/s.
…………………………………. [Insert name of the Resolution Applicant(s)] (“Bank Guarantee”), without
any protest or demur, notwithstanding any dispute between the Bank and the M/s. ______________ [Insert the
name of RA].
This Guarantee shall be valid and binding on the Guarantor Bank up to and including
……………………….[Insert date of validity of the Bank Guarantee] and shall in no event be terminable, for
any change in the constitution of the Guarantor Bank and/or the Bank or for any other reasons whatsoever and
the liability of the Guarantor Bank hereunder shall not be impaired or discharged by any extension of time or
variations or alternations made, given, or agreed with or without our knowledge or consent, by or between
……………………..[Insert name of the Resolution Applicant(s)] (“Resolution Applicant(s)”) and the Bank
(acting on the instructions of the Committee of Creditors of (Name of the Corporate Debtor), as defined under
the RFRP).
Our liability under this Guarantee is restricted to [●] only. Our Guarantee shall remain in force until
……………………………………….. [Insert the date of validity of the Bank Guarantee as per clause 1.8 of
the RFRP]. The Bank shall be entitled to invoke this Guarantee up to [number of days] days from the last date
of the validity of this Bank Guarantee by issuance of a written demand to invoke this Guarantee.
The Guarantor Bank hereby expressly agrees that it shall not require any proof in addition to the written demand
from the Bank (made in any format) raised at the above-mentioned address of the Guarantor Bank, in order to
make the said payment to [●].
The Guarantor Bank shall make payment hereunder on first demand without restriction or conditions and
notwithstanding any objection by, ……………………….. [Insert name of the Resolution Applicant(s)] and / or
any other person. The Guarantor Bank shall not require the Bank to justify the invocation of this BANK
GUARANTEE, nor shall the Guarantor Bank have any recourse against M/s. ________________ [Insert the
name of the RA] in respect of any payment made hereunder.
This BANK GUARANTEE shall be interpreted in accordance with the laws of India and the courts at [State]
shall have exclusive jurisdiction. The Guarantor Bank represents that this BANK GUARANTEE has been
established in such form and with such content that it is fully enforceable in accordance with its terms as against
the Guarantor Bank in the manner provided herein.
This BANK GUARANTEE shall not be affected in any manner by reason of merger, amalgamation,
restructuring, liquidation, winding up, dissolution or any other change in the constitution of the Guarantor Bank.
This BANK GUARANTEE shall be a primary obligation of the Guarantor Bank and accordingly the Bank shall
not be obliged before enforcing this BANK GUARANTEE to take any action in any court or arbitral proceedings
www.taxguru.in
40
against the Resolution Applicant(s), to make any claim against or any demand on the Resolution Applicant(s)
or to give any notice to the Resolution Applicant(s) or to exercise, levy or enforce any distress, diligence or
other process against the Resolution Applicant(s).
The Guarantor Bank hereby agrees and acknowledges that the Bank shall have a right to invoke this Bank
Guarantee either in part or in full, as it may deem fit.
Notwithstanding anything contained hereinabove, our liability under this Guarantee is restricted to [●] and it
shall remain in force until ……………………… [Insert date as per clause 1.8 of the RFRP], with an additional
claim period of [number of days] days thereafter. This BANK GUARANTEE shall be extended from time to
time for such period, as may be desired by the Resolution Applicant(s). We are liable to pay the guaranteed
amount or any part thereof under this Bank Guarantee only if [●] serves upon us a written claim or demand.
In witness whereof the Guarantor Bank, through its authorised officer, has set its hand and stamp on this
…………….. day of ……………………… at …………………….
Witness:
1. ……………………………………. Signature
Name and Address. Name:
2. ………………………………….. Designation with Bank Stamp
Name and Address
For:
……………………………………………. [Insert Name of the Bank]
Banker’s Stamp and Full Address:
Dated this ………………… day of …………… 20…..
Notes:
*The Stamp paper should be in the name of the Guarantor Bank.
www.taxguru.in
41
APPENDIX 4
FORMAT FOR PERFORMANCE GUARANTEE
(To be executed on non-judicial stamp paper of appropriate stamp duty value relevant to the place of execution)
<Beneficiary Name>
1. In consideration of ……………………..[Insert name of the Successful Resolution Applicant(s) with
address] (hereinafter called the “Successful Resolution Applicant(s)”) agreeing to undertake the
obligations under the RFRP dated [●], issued by the Resolution Professional, in consultation with the CoC
and pursuant to the approval of the CoC vide voting dated [date of voting results] pursuant to meeting dated
[date of CoC meeting], (hereinafter called “RFRP”) and any other required documents, issued by the
Resolution Professional, in consultation with the CoC and pursuant to the approval of the CoC in respect of
the Resolution Plan for (Name of the Corporate Debtor) (hereinafter called the “Corporate Debtor”) the
………………………………. [Insert name and address of the bank issuing the guarantee and address of
the head office] (hereinafter called the “Guarantor Bank”) hereby agrees unequivocally, irrevocably and
unconditionally to pay to ___________Bank, having its office at _________________(hereinafter referred
to as “the Bank”) forthwith on demand in writing from any officer authorised by it in this behalf without
any protest or demur, any amount up to and not exceeding Rs. ………………. (Rupees ……………….
only) on behalf of …………………………………. [Insert name of the Successful Resolution Applicant(s)]
(hereinafter called “Performance Guarantee”) against any and all loss and/or damage caused to or suffered
by or would be caused to or suffered by the Company by reasons of any breach by the said Resolution
Applicant(s) of any of the terms and conditions contained in the RFRP.
2. We, [Insert name of bank] do hereby undertake to pay the amounts due and payable under this Performance
Guarantee without any demur, merely on a demand from the Bank including from any officer authorised by
it in this behalf. Any such demand made on us, shall be conclusive as regards the amount due and payable
by us under this Performance Guarantee. However, our liability under this Bank Guarantee shall be
restricted to an amount not exceeding Rs. ……………. (Rupees ……………………………. only).
3. We undertake to pay to the _________ Bank, any money so demanded notwithstanding any dispute or
disputes raised by the Successful Resolution Applicant(s) in any suit or proceeding pending before any
Court or Tribunal relating thereto our liability under this present being absolute and unequivocal.
4. The Guarantor Bank shall make payment hereunder on first demand without restriction or conditions and
notwithstanding any objection by,……………….. [Insert name of the Successful Resolution Applicant(s)]
and / or any other person. The Guarantor Bank shall not require the Bank to justify the invocation of this
Bank Guarantee, nor shall the Guarantor Bank have any recourse against M/s. _____________ [Insert the
name of RA] in respect of any payment made hereunder.
5. The payment so made by us under this bond shall be a valid discharge of our liability for payment thereunder
and the Successful Resolution Applicant(s) shall have no claim against us for making such payment.
www.taxguru.in
42
6. We, the Guarantor Bank further agree that the guarantee herein contained shall remain in full force and
effect for a period of [… (…..)] months from the date hereof and that it shall continue to be enforceable till
all the dues of the Successful Resolution Applicant(s) in relation to the Resolution Plan and /or under or by
virtue of the RFRP have been fully paid and its claim satisfied or discharged or till the Bank certifies that
the Resolution Plan has been effected and that the terms and conditions of the RFRP have been fully and
properly carried out by the said Successful Resolution Applicant(s). The Bank shall be entitled to invoke
this Performance Guarantee up to [… (…..)] days from the last date of the validity of this Performance
Guarantee by issuance of a written demand to invoke this Performance Guarantee.
7. We, the Guarantor Bank, further agree that the Bank and/or the CoC shall have the fullest liberty without
our consent to vary any of the terms and conditions of the RFRP or to extend time of performance by the
said Successful Resolution Applicant(s) from time to time or to postpone for any time or from time to time
any of the powers exercisable by the Bank against the said Successful Resolution Applicant(s) and to forbear
or enforce any of the terms and conditions relating to the RFRP. We shall not be relieved from our liability
by any reason of any such variation or extension being granted to the said Successful Resolution
Applicant(s) or by any such matter or thing whatsoever which under the law relating to sureties would but
for this provision have effect of so relieving us.
8. This Performance Guarantee shall be valid and binding on the Guarantor Bank and shall in no event be
terminable by notice or any change in the constitution of the Guarantor Bank or by any other reasons
whatsoever and our liability hereunder shall not be impaired or discharged by any extension of time or
variations or alternations made, given, or agreed with or without our knowledge or consent, by or between
the parties. This Performance Guarantee shall not be affected in any manner by reason of merger,
amalgamation, restructuring, liquidation, winding up, dissolution or any other change in the constitution of
the Guarantor Bank.
9. This Performance Guarantee shall be interpreted in accordance with the laws of India and the courts at
[State] shall have exclusive jurisdiction. The Performance Guarantor Bank represents that this Performance
Guarantee has been established in such form and with such content that it is fully enforceable in accordance
with its terms as against the Performance Guarantor Bank in the manner provided herein.
10. This Performance Guarantee shall be a primary obligation of the Guarantor Bank and accordingly the Bank
shall not be obliged before enforcing this Performance Guarantee to take any action in any court or arbitral
proceedings against the Successful Resolution Applicant(s), to make any claim against or any demand on
the Successful Resolution Applicant(s) or to give any notice to the Successful Resolution Applicant(s) or to
exercise, levy or enforce any distress, diligence or other process against the Successful Resolution
Applicant(s).
11. We, [●], lastly undertake not to revoke this Performance Guarantee during its currency.
www.taxguru.in
43
NOTWITHSTANDING anything contained herein:
1. This Bank Guarantee shall be valid till………….. [Insert the date of validity of the Performance Guarantee
as per the RFRP].; and
2. We are liable to pay the guaranteed amount or any part thereof under this Bank Guarantee only and only if
you serve upon us a written claim or demand on or before the…………………. .
3. This Performance Guarantee shall be extended from time to time for such period, as may be desired by the
Bank. We are liable to pay the guaranteed amount or any part thereof under this Bank Guarantee only if
Bank serves upon us a written claim or demand.
All claims under this Performance Guarantee shall be payable at [………………..].
This Performance Guarantee will be returned to us as soon as the purpose for which it is issued is fulfilled.
In witness whereof the Guarantor Bank, through its authorised officer, has set its hand and stamp on this
…………….. day of ……………………… at …………………….
Witness:
1. ……………………………………. Signature
Name and Address. Name:
2. ………………………………….. Designation with Bank Stamp
Name and Address
For:
……………………………………………. [Insert Name of the Bank]
Banker’s Stamp and Full Address:
Dated this ………………… day of …………… 20…..
Notes:
*The Stamp paper should be in the name of the Guarantor Bank.
www.taxguru.in
44
APPENDIX 5
UNDERTAKING BY RESOLUTION APPLICANT(S)
[On the letter head of the Resolution Applicant(s) or Lead member in case of consortium]
Resolution Applicant(s) Undertaking
To,
Name of the RP,
Resolution Professional
(Name of the Corporate Debtor)
Dear Sir,
Sub: Resolution Applicant(s)’ undertaking in relation to the Binding Resolution Plan in response to RFRP dated
[●], issued by the Resolution Professional, in consultation with the CoC and pursuant to the approval of the CoC
vide voting dated [Date of voting results] pursuant to meeting dated [Date of the CoC meeting] (“RFRP”)
1. We, [Insert name of the Resolution Applicant(s)] (“Resolution Applicant(s)”), refer to the RFRP and
provide our unconditional acceptance of the terms and conditions of the RFRP as amended from time to
time in accordance with the procedure set out under the RFRP, including but not limited to the Disclaimer
contained in the RFRP. Further and in relation to the said RFRP and the Resolution Plan Process set out
there under, the Resolution Applicant(s) undertakes, agrees and acknowledges that the Resolution
Applicant(s) (collectively, the “Undertaking”):
a) shall execute all such deeds and documents as may be required to be so executed pursuant to the
completion of the Resolution Plan Process;
b) has submitted the Binding Resolution Plan and other requisite documents strictly as per forms
prescribed in the RFRP, without any deviations or conditions and without setting out any assumptions
or notes qualifying the Resolution Plan;
c) the Binding Resolution Plan shall be valid up to the end of the period set out under the RFRP;
d) the Resolution Plan has been duly signed by a director of the Resolution Applicant(s) as a
Representative or Power of Attorney holder, as applicable
e) has obtained all the corporate authorizations required or expedient under Applicable Law for the
submission of the Resolution Plan;
f) shall, except as otherwise required under the RFRP, upon being notified as the Successful Resolution
Applicant(s), pay such amounts and consideration as set out in the Resolution Plan in the manner
agreed to between the Resolution Applicant(s) and the CoC at terms mutually agreeable to CoC and
the Resolution Applicant(s) strictly in accordance with the procedure set out under the RFRP;
g) shall execute such agreement(s) as may be required, to the satisfaction of the Resolution Professional
in accordance with the RFRP;
www.taxguru.in
45
h) has provided all information and data during this Resolution Plan Process, in a manner that is true,
correct, accurate and complete and no such information, data or statement provided by the Resolution
Applicant(s) is inaccurate or misleading in any manner; and
i) has submitted a Binding Resolution Plan that conforms to the requirements of the RFRP as on the
date of this Undertaking.
2. We further undertake and confirm that the Proposal submitted as part of the Binding Resolution Plan is
unconditional and acknowledge and agree that the CoC reserves the right to negotiate terms with the
Selected Resolution Applicant(s) and any decision taken by the CoC in relation to the Resolution Plan and
the Resolution Plan Process shall be final and binding on the Resolution Applicant(s). Further, in addition
to the undertaking set out under clause 1 (h) above, the Resolution Applicant(s) confirms that all the
confirmations, declarations and representations made in the Binding Resolution Plan are valid as on the date
of this Undertaking and acknowledge that the CoC may at their sole discretion be free to cancel our Binding
Resolution Plan and encash the Earnest Money Deposit where such confirmations, declarations and
representations are found to be incorrect or misleading.
3. Capitalised terms used herein but not defined shall have the meaning assigned to such term in the RFRP.
Thank you.
Yours sincerely,
……………………………………..
[Signature and name of Attorney]
Rubber stamp/seal of the Resolution Applicant(s)
www.taxguru.in
46
APPENDIX 6
FORMAT FOR POWER OF ATTORNEY
(To be on non-judicial stamp paper of appropriate value as per the stamp act relevant to the place of execution.
Foreign companies submitting Binding resolution plans are required to follow the applicable law in their
country.)
POWER OF ATTORNEY
Know all men by these presents, We, [Insert name and address of the registered office of the Resolution
Applicant(s)] (“Resolution Applicant(s)”) do hereby constitute, appoint and authorize Mr./Ms. [Insert name
and residential address of the attorney] who is presently holding the position of [●] as our true and lawful
attorney (“Attorney”), to do in the name of the Resolution Applicant(s) and on the behalf of the Resolution
Applicant(s), all such acts, deeds and things necessary in connection with or incidental to the submission of the
Binding Resolution Plan or any other document as may be required under or pursuant to as per the provisions
of the RFRP dated [●], issued by the Resolution Professional, in consultation with the CoC and pursuant to the
approval of the CoC vide voting dated [Date of voting results] pursuant to meeting dated [Date of the CoC
meeting] (“RFRP”), including the signing and submission of Binding Resolution Plan and all other documents
related to the Binding Resolution Plan, including but not limited to undertakings, letters, certificates,
acceptances, clarifications, guarantees or any other deeds or document that the Resolution Professional may
require the Resolution Applicant(s) to submit. The aforesaid Attorney is further authorised to provide
representations, information or responses to the Resolution Professional, and represent the Resolution
Applicant(s) and generally deal with the Resolution Professional and CoC with respect to the Binding Resolution
Plan and the Binding Resolution Plan Submission Process, in accordance with the terms of the RFRP.
We hereby ratify all acts, deeds and things done by the said Attorney pursuant to this power of attorney and that
all acts, deeds and things done by the aforesaid Attorney shall be binding on the Resolution Applicant(s) and
shall always be deemed to have been done by the Resolution Applicant(s).
All the terms used herein but not defined shall have the meaning ascribed to such terms under the RFRP.
Signed by the within named
[Insert the name of the Resolution Applicant(s)]
Through the hand of
Mr. ……………………………………….
(Name, designation and address of the executant)
Duly authorised by the Board to issue such Power of Attorney
Dated this ………………………. day of ………
Accepted
………………………………
Signature of Attorney
www.taxguru.in
47
(Name, designation and address of the Attorney)
Attested
…………………………………
(Signature of the executant)
(Name, designation and address of the executant)
WITNESS
1. ………………………………………………. (Signature)
Name ………………………………….
Designation...........…………………..
2. ………………………………………………. (Signature)
Name ………………………………….
Designation...........…………………..
……………………………………
Signature and stamp of Notary of the place of execution
Common seal of ……………… has been affixed in my / our presence pursuant to Board of Director’s
Resolution dated……
Notes:
(1) The mode of execution of the power of attorney should be in accordance with the procedure, if any, laid
down by the Applicable Law and the charter documents of the Resolution Applicant(s) and the same should
be under common seal of the Resolution Applicant(s) affixed in accordance with applicable procedure.
Further, the person whose signatures are to be provided on the Power of Attorney shall be duly authorised
by the Resolution Applicant(s) in this regard.
(2) The person authorised under this Power of Attorney, in the case of the Resolution Applicant(s) being a
public Company, or a private Company which is a subsidiary of a public Company, in terms of the
Companies Act, 2013, with a paid up share capital of more than Rs. 5,00,00,000 (Rupees Five Crores only),
should be the managing director / whole time director / manager appointed under section 203 of the
Companies Act, 2013. In all other cases, the person authorised should be a director duly authorised by a
board resolution duly passed by the Company.
(3) In case of the Resolution Applicant(s) being a foreign Company, the same shall be signed by a person of
equivalent position and the requisite legalization and consularisation process shall be duly completed.
(4) In the event, the power of attorney has been executed outside India, the same shall be required to be duly
notarized by a notary public of the jurisdiction where it is executed.
www.taxguru.in
48
(5) Also, wherever required, the Resolution Applicant(s) should submit for verification the extract of the charter
documents and documents such as a board resolution / power of attorney, in favour of the person executing
this power of attorney for delegation of power hereunder on behalf of the Resolution Applicant(s).
(6) The Resolution Applicant(s) shall submit a power of attorney or such other equivalent authorisation as may
be deemed to be adequate in the jurisdiction of incorporation of the Resolution Applicant(s).
www.taxguru.in
49
APPENDIX 6(A)
FORMAT FOR POWER OF ATTORNEY FOR LEAD MEMBER
(In case of Consortium)
(To be on non-judicial stamp paper of appropriate value as per the stamp act relevant to the place of execution.
Foreign companies submitting Binding resolution plans are required to follow the applicable law in their
country.)
Whereas, ____________, ____________, and ____________ (collectively the “Consortium”) being Members
of the Consortium are interested in submitting Binding Resolution Plans under or pursuant to as per the
provisions of the RFRP dated [●], issued by the Resolution Professional, in consultation with the CoC and
pursuant to the approval of the CoC vide voting dated [Date of voting results] pursuant to meeting dated [Date
of the CoC meeting], hereinafter called “RFRP”) and any other required documents, issued on behalf of the
Committee of Creditors in respect of the Binding Resolution Plan for (Name of the Corporate Debtor)
(hereinafter called the “Corporate Debtor”) , and
Whereas, it is necessary for the Members of the Consortium to designate one of them as the Lead Member with
all necessary power and authority to do for and on behalf of the Consortium, all acts, deeds and things as may
be necessary in connection with the Consortium’s submission for Binding Resolution Plans.
NOW THEREFORE KNOW ALL MEN BY THESE PRESENTS
We, M/s ____________ having our registered office at ____________, M/s. ____________, having our
registered office at ____________, and M/s. ____________, having our registered office at ____________, [the
respective names and addresses of the registered office] (hereinafter collectively referred to as the “Principals”)
do hereby irrevocably designate, nominate, constitute, appoint and authorise M/s ____________, having its
registered office at _____________, being one of the Members of the Consortium, as the Lead Member and true
and lawful attorney of the Consortium (hereinafter referred to as the “Attorney”) and hereby irrevocably
authorise the Attorney (with power to sub-delegate) to conduct all business for and on behalf of the Consortium
and any one of us during the Resolution Plan Process and, in the event the Consortium is selected as the
Successful Resolution Applicant(s), during the execution of the Resolution Plan, and in this regard, to do on our
behalf and on behalf of the Consortium, all or any of such acts, deeds or things as are necessary or required or
incidental to the signing and submission of Binding Resolution Plan and all other documents related to the
Binding Resolution Plan, including but not limited to undertakings, letters, certificates, acceptances,
clarifications, guarantees or any other deeds or document that the Resolution Professional may require the
Resolution Applicant(s) to submit.
AND hereby agree to ratify and confirm and do hereby ratify and confirm all acts, deeds and things lawfully
done or caused to be done by our said Attorney pursuant to and in exercise of the powers conferred by this
Power of Attorney and that all acts, deeds and things done by our said Attorney in exercise of the powers hereby
conferred shall and shall always be deemed to have been done by us/ Consortium.
IN WITNESS WHEREOF WE THE PRINCIPALS ABOVE NAMED HAVE EXECUTED THIS POWER OF
ATTORNEY ON THIS ________ DAY OF ________ 20**.
For ____________ (Name & Title)
www.taxguru.in
50
For ____________ (Name & Title)
For ____________ (Name & Title)
Witnesses:
1
2
(Executants)
(To be executed by all the Members of the Consortium)
……………………………………
Signature and stamp of Notary of the place of execution
Common seal of ……………… has been affixed in my / our presence pursuant to Board of Director’s
Resolution dated……
Notes:
(1) The mode of execution of the Power of Attorney should be in accordance with the procedure, if any, laid
down by the applicable law and the charter documents of the executant(s) and when it is so required, the
same should be under common seal affixed in accordance with the required procedure.
(2) Also, wherever required, the consortium members should submit for verification the extract of the charter
documents and documents such as a resolution/ power of attorney in favour of the person executing this
Power of Attorney for the delegation of power hereunder on behalf of the consortium member.
(3) In the event, the power of attorney has been executed outside India, the same shall be required to be duly
notarized by a notary public of the jurisdiction where it is executed.
www.taxguru.in
51
APPENDIX 6(B)
FORMAT FOR BOARD RESOLUTION
(On the letter head of the Resolution Applicant(s))
CERTIFIED TRUE COPY OF RESOLUTION PASSED BY THE BOARD OF DIRECTORS (“BOARD”) OF
[Insert name of the Resolution Applicant(s)] (“COMPANY”) IN THE MEETING HELD ON [Insert Date], AT
[Insert Time] AT [Insert Place]
WHEREAS pursuant to the expressions of interest dated [●] (“EOI”), and the subsequent RFRP dated [●],
issued by the Resolution Professional, in consultation with the CoC and pursuant to the approval of the CoC
vide voting dated [Date of voting results] pursuant to meeting dated [Date of the CoC meeting] (hereinafter
called “RFRP”) and any other required documents, issued on behalf of the Committee of Creditors in respect
of inviting the Binding Resolution Plan for (Name of the Corporate Debtor), the Company has been shortlisted
by the Resolution Professional (acting on the instructions of the Committee of Creditors), for the purpose of
submission of the Binding Resolution Plan.
In view of the above, the Board has resolved as follows:
“RESOLVED THAT any of the directors of the Company, be and is hereby authorised to take all the steps
required to be taken by the Company for the submission of the Binding Resolution Plan in accordance with the
terms of the RFRP, including the following:
a) submit the Binding Resolution Plan and other requisite documents, in accordance with the terms of the
RFRP;
b) execute all other agreements, deeds, writings and power of attorney as may be required in relation to the
RFRP, including any amendments or modifications as may be suggested by the Resolution Professional
(on the instructions of the Committee of Creditors) and/or the Committee of Creditors to any of such
executed agreements, documents or other writings and in general to do all such acts, deeds and all things
as may be required or considered necessary under or in respect of the RFRP;
c) negotiate the terms and conditions for the acquisition of [Management Control or Asset Acquisition of
the Corporate Debtor], with the members of the CoC;
d) pay such amounts and consideration, in the manner as may be agreed with the CoC, in accordance with
the procedure set out under the RFRP, for the purpose of acquisition of [Management Control or Asset
Acquisition] of the Corporate Debtor; and
e) to generally do or cause to be done all such acts, matters, deeds and things as may be necessary or desirable
in connection with or incidental or for the purpose of implementation and giving effect to the above
resolutions for and on behalf of the Company, and to comply with all other requirements in this regard.”
“RESOLVED FURTHER THAT a certified copy of the foregoing resolution be furnished as may be required,
under the signature of [the Company Secretary / any two of the Directors of the Company].”
Certified to be true
For the Company
www.taxguru.in
52
________________
Director(s) / Company Secretary
Notes:
(1) The contents of the format may be suitably re-worded indicating the identity of the entity passing the
resolution.
(2) In case of the Board Resolution being provided by a Company incorporated in India, the Board
Resolution shall to be notarized by a notified notary. In the event the Board resolution is from a
Company incorporated outside India, the same shall be duly notarized in the jurisdiction of
incorporation of the Company.
(3) This format may be modified only to the limited extent required to comply with the local regulations and
laws applicable to a foreign entity submitting this resolution. For example, reference to Companies Act
2013 may be suitably modified to refer to the law applicable to the entity submitting the resolution.
However, in such case, the foreign entity shall submit an opinion issued by the legal counsel of such
foreign entity, stating that the board resolutions are in compliance with the applicable laws of the
respective jurisdictions of the issuing Company and the authorizations granted therein are true and
valid.
(4) The Board Resolution is to be certified by the Company Secretary / Directors, in accordance with
applicable law and the constitutional documents of the Company.
www.taxguru.in
53
THE STAMP PAPER SHOULD BE IN THE NAME OF THE GUARANTOR BANK.
APPENDIX-7
EARNEST MONEY DEPOSIT AMOUNT PAYMENT BY PARENT COMPANY
To,
[Name of the RP],
Resolution Professional
[Address of Resolution Professional]
[Copy to:]
[Insert name of the Resolution Applicant(s) with address]
Dear Sir,
Sub: Payment of the amounts of Earnest Money on behalf of the Resolution Applicant(s) in relation to
the Resolution Plan of (Name of the Corporate Debtor)
In light of the Resolution Plan for (Name of the Corporate Debtor) submitted by
…………………….. [Insert name of the Resolution Applicant(s) with address] in accordance with and
subject to the provisions of the RFRP dated [ ] in relation to the captioned transaction (“RFRP”),
issued by t he Resolution Professional, in consultation with the CoC and pursuant to the approval of the CoC
vide voting dated [Date of voting results] pursuant to meeting dated [Date of the CoC meeting] and any other
relevant documents,
………………………………. [Insert name and address of the Parent Company and address of the head
office] hereby declares and confirms it is [an / the] [Insert relationship of the P a r e n t Company with
the Resolution Applicant(s)] of the Resolution Applicant(s) (“Parent Company”), and the payment of
the Earnest Money amount vide [Insert mode of payment] (“Payment”) is on behalf of the Resolution
Applicant(s). The Parent Company acknowledges that such amounts paid as Earnest Money shall be
subject to the terms of the RFRP and hereby waives any right to claim any refund or adjustment of
the amounts of such Payment except in accordance with the terms of the RFRP.
The Parent Company hereby represents and warrants that payment of amounts on behalf of the Resolution
Applicant(s) is in compliance with Applicable Law.
Capitalized terms used but not defined in this letter shall have the meanings ascribed to such terms in the
RFRP.
Thank you.
Yours sincerely,
www.taxguru.in
54
……………………………………..
[Signature and name of the Authorized Officer of the Parent Company]
Rubber stamp/seal of the Parent Company
ACKNOWLEDGMENT
We hereby acknowledge and confirm the statements set out above by the Parent Company.
Yours sincerely,
……………………………………..
[Signature and name of the Authorized Officer of the Resolution Applicant(s)]
Rubber stamp/seal of the Resolution Applicant(s)
www.taxguru.in
55
APPENDIX 8
PERFORMANCE GUARANTEE AMOUNT PAYMENT BY PARENT COMPANY
To,
[Name of the RP],
Resolution Professional
[Address of Resolution Professional]
[Copy to:]
[Insert name of the Resolution Applicant(s) with address]
Dear Sir,
Sub: Payment of the amounts of the Performance Guarantee on behalf of the Resolution Applicant(s) in
relation to the Resolution Plan of (Name of the Corporate Debtor)
In light of the Resolution Plan for (Name of the Corporate Debtor) submitted by
……………………..[Insert name of the Successful Resolution Applicant(s) with address] in accordance
with and subject to the provisions of the RFRP dated [ ] in relation to the captioned transaction (“RFRP”),
issued by t he Resolution Professional, in consultation with the CoC and pursuant to the approval of the
CoC vide voting dated [Date of voting results] pursuant to meeting dated [Date of the CoC meeting], and
any other relevant documents, ………………………………. [Insert name and address of the Parent
Company and address of the head office] hereby declares and confirms it is [an / the] [Insert relationship
of the Parent Company with the Successful Resolution Applicant(s)] of the Successful Resolution
Applicant(s) (“Parent Company”), and the payment of the Performance Guarantee amount vide [Insert
mode of payment] (“Payment”) is on behalf of the Successful Resolution Applicant(s). The Parent
Company acknowledges that such amounts paid as Performance Guarantee shall be subject to the terms
of the RFRP and hereby waives any right to claim any refund or adjustment of the amounts of such
payment except in accordance with the terms of the RFRP.
The Parent Company hereby represents and warrants that payment of amounts on behalf of the Successful
Resolution Applicant(s) is in compliance with Applicable Law.
Capitalized terms used but not defined in this letter shall have the meanings ascribed to such terms in the
RFRP.
Thank you.
Yours sincerely,
……………………………………..
[Signature and name of the Authorized Officer of the Parent Company]
www.taxguru.in
56
Rubber stamp/seal of the Parent Company
ACKNOWLEDGMENT
We hereby acknowledge and confirm the statements set out above by the Parent Company.
Yours sincerely,
……………………………………..
[Signature and name of the Authorized Officer of the Successful Resolution Applicant(s)]
Rubber stamp/seal of the Successful Resolution Applicant(s)
www.taxguru.in
57
APPENDIX 9
COMPOSITION AND OWNERSHIP STRUCTURE OF THE RESOLUTION
APPLICANT(S)
[In case of consortium, for each member of the consortium]
(On the letter head of the Resolution Applicant(s) duly stamped)
a. Corporate Details:
Please provide the following information for the Resolution Applicant(s):
i. Company’s Name, Address, Nationality details:
Name
Registered Office
Website Address
Corporate Identification Number, if any:
Country of Origin:
Address for Correspondence:
Year and Date of Incorporation
Company's Business Activities:
Name of the Representatives
Name and details of all Connected Persons
Telephone Number
Email Address
Fax No
In case of a consortium, following details of the members of consortium shall be provided:
Members of consortium Equity Interest (%)
held or to be held in
the consortium
Nature of
establishment of
the member
Member 1 (Lead Partner)
Member 2
[Please add extra rows if
there are more than two
members]
ii. Please provide the following documents:
a) Copy of the memorandum and articles of association and certificate of
incorporation or other equivalent organizational document (as applicable in the
case of the jurisdiction of incorporation of the Resolution Applicant(s) and all
Connected Persons), including amendments, if any, certified by the company
secretary, or equivalent or a director of the Resolution Applicant(s) (as an annexure
to this Format)
www.taxguru.in
58
b) Authority letter in favor of the Resolution Professional from the Resolution
Applicant(s) authorizing CoC or the Resolution Professional or Resolution Process
Advisor to seek reference from their respective bankers, Financial Creditor, financing
institutions of the Resolution Applicant(s) and any other person.
c) Annual report or audited financials of the Resolution Applicant(s) and its group
companies for the preceding 3 (three) years whose revenue and net worth numbers
have been submitted as part of the Expression of Interest. In case of a financial
investor / fund, in addition to the above, statutory auditor’s certificate for Assets
under Management as of immediately preceding financial year shall be provided.
d) If the Resolution Applicant(s) is a consortium, then copy of the Memorandum and
Articles of Association and certificate of incorporation or other equivalent
organizational document (as applicable in the case of a foreign company), including
their amendments of each of the consortium member (certified by the company
secretary or a director) (as attachment to this document).
e) Copy of permanent account number card of the Company (or equivalent
identification for an overseas entity);
f) Credit opinion report from the principal bank of the Resolution Applicant and its
Parent company;
g) External rating report if available, for the Resolution Applicant(s) and the Parent
Company;
h) Names and Details of the directors of the Resolution Applicant(s), all
Connected Persons and the Parent Company as per format below:
Name Designation Identification Nos. Full
Address
Other
directorships DIN PAN Passport
The Resolution Applicant(s) shall submit photocopy of the passport for each of the
Directors;
i) Details of Ownership Structure of the Resolution Applicant(s) and its
relationship with all Connected Persons:
Details of persons owning 10% (ten percent) or more of the total paid up equity of
the Resolution Applicant(s).
Name of the Resolution Applicant(s) ……………. Status of
equity holding as on ……………………….
Name of
Equity
Holder
Type and Number
of Shares owned
% of Equity
Holding
Extent of Voting
Control (%)
www.taxguru.in
59
1.
2.
3.
….
j) Details of transactions, if any, of the Resolution Applicant(s) and/or any
Connected Persons with the Company in the preceding two years;
iii. Please clarify if the Resolution Applicant(s) and/or any Connected Person has been
convicted of any offence in the preceding five years, and if so, please share all relevant
details of the same.
iv. Please clarify of there are any criminal proceedings, investigations, enquiries etc.
commenced or pending against the Resolution Applicant(s) and/or any Connected Person,
and if so, please share all relevant details of the same.
v. Please clarify if any of the promoters, shareholders, directors and/or key managerial personnel
of the Resolution Applicant(s) and/or any Connected Person have been disqualified to act
as a director under the provisions of the Companies Act, 2013, and if so, please share all
relevant details of the same
vi. Please clarify if the Resolution Applicant(s) and/or any Connected Person has been identified
as a willful defaulter by any bank or financial institution or consortium thereof in accordance
with the guidelines of the RBI, and if so, please share all relevant information and details in
relation to the same; and
vii. Please clarify if the Resolution Applicant(s) and/or any Connected Person has been disqualified
or debarred from accessing to or trading in the securities markets under any order of the
Securities and Exchange Board of India and/or any other such judicial authority.
For and Behalf of M/s,
{Signature and Name of Attorney as Power of Attorney}
Rubber Seal of Resolution Applicant(s)
Status of equity holding should be provided not earlier than [number of days] days prior to Binding Plan Due
Date.
Details of the Parent Company, Ultimate Parent and / or the Group Companies, affiliates of the Resolution
www.taxguru.in
60
Applicant(s), and corporate guarantor (if any corporate guarantee constitutes part of the Resolution Plan), and
their respective business activity shall be provided. The determination of the relationship of the Parent
Company, Ultimate Parent and / or the Group Companies and affiliates of the Resolution Applicant shall not
be [number of days] days prior to the Resolution Plan Submission Date. Documentary evidence in form of a
certificate from CS or Statutory Auditor to submitted along with the Resolution Plan.
www.taxguru.in
61
APPENDIX 10
AFFIDAVIT ON RS 100 STAMP PAPER
I, …………………, S/o Shri ………………………………………….. aged ………… years, residing at
……………………………………………… designated as [ ] of [ ] (Resolution Applicant) having its
registered office at ___________________________ do solemnly affirm and declare on oath as under: -
1. I state that an insolvency resolution process has been initiated against (Name of the Corporate Debtor)
(Corporate Debtor) vide order dated [Order date] (Admission Order) passed by National Company
Law Tribunal,(State) Bench (Adjudicating Authority) in an application filed by operational creditor
against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (amended
up to date) (IBC).
2. I state that the present affidavit is sworn by me on behalf of the Resolution Applicant in compliance of
section 29A of the IBC.
3. I on behalf of the Resolution Applicant and any other person acting jointly or in concert with the
Resolution Applicant hereby confirm that:
(i) The Resolution Applicant and any connected person as per the Explanation I provided under section
29A of the IBC is not an undischarged insolvent; or
(ii) The Resolution Applicant and any connected person as per Explanation I provided under section 29A
of the IBC, is not identified as a willful defaulter in accordance with the guidelines of the Reserve Bank
of India issued under the Banking Regulation Act, 1949; or
(iii) At the time of submission of the Resolution Plan, the account of the Resolution Applicant and any
connected person as per Explanation I provided under section 29A of the IBC or an account of the
corporate debtor under the management or control of such person of whom such person is a promoter,
IBC is not classified as non-performing asset in accordance with the guidelines of the Reserve Bank of
India issued under the Banking Regulation Act, 1949 or guidelines of a financial sector regulator issued
under any other law at the time being in force and at least a period of one year or more has lapsed from
the date of such classification till the date of commencement of corporate insolvency resolution process
of the corporate debtor and that I have not failed to make the payment of all overdue amounts with
interest thereon and charges relating to non-performing asset before submission of Resolution Plan; or
(iv) The Resolution Applicant and any connected person as per Explanation I provided under section 29A
of the IBC have not been convicted for any offence punishable with imprisonment for 2 years or more
under any Act specified in the Twelfth Schedule or for seven years or more under any law for the time
being in force or a period of two years has expired from the date of release of such imprisonment; or
(v) The Resolution Applicant and any connected person as per Explanation I provided under section 29A
of the IBC have not been disqualified to act as a director under the Companies Act 2013; or
(vi) The Resolution Applicant and any connected person as per Explanation I provided under section 29A
of the IBC have not been prohibited by the Securities and Exchange Board of India from trading in
securities or assessing the securities markets; or
www.taxguru.in
62
(vii) The Resolution Applicant and any connected person as per Explanation I provided under section 29A
of the IBC have not indulged in preferential transaction or undervalued transaction or fraudulent
transaction in respect of which an order has been made by the Adjudicating Authority under the IBC;
or
(viii) The Resolution Applicant and any connected person as per Explanation I provided under section 29A
of the IBC have not executed a guarantee in favor of a creditor, in respect of a corporate debtor against
which an application for insolvency resolution made by such creditor has been admitted under the IBC
and no such guarantee has been invoked by the creditor or remains unpaid in full or part; or
(ix) The Resolution Applicant and any connected person a per Explanation I provided under section 29A of
the IBC are not subject to any disability, corresponding to clauses mentioned above under any law in a
jurisdiction outside India.
(i) That the Resolution Applicant unconditionally and irrevocably agrees and undertakes that it shall
make full disclosure in respect of itself and all its connected persons as required under Regulation
38(3) of the CIRP Regulations.
(ii) That the Resolution Applicant unconditionally and irrevocably agrees and undertakes that it shall
make full disclosure in respect of itself and all its connected persons as per the provisions of the
CIRP and the rules and regulations framed thereunder to submit a resolution plan and that it shall
provide all documents, representations and information as may be required by the RP or the CoC to
substantiate to the satisfaction of the RP and the CoC that the Resolution Applicant is eligible under
the IBC and the rules and regulations thereunder to submit a resolution plan in respect of Corporate
Debtor.
(iii) That the Resolution Applicant unconditionally and irrevocably undertakes that it shall provide all
data, documents and information as may be required to verify the statements made under this
affidavit.
(iv) That the Resolution Applicant understands that the CoC and the RP may evaluate the resolution
plan to be submitted by the Resolution Applicant or any other person acting jointly with it and such
evaluation shall be on the basis of the confirmations, representations and warranties provided by
the Resolution Applicant under this affidavit.
(v) That the Resolution Applicant agrees that each member of the CoC and the RP are entitled to rely
on the statements and affirmations made in this affidavit for the purposes of determining the
eligibility and assessing, agreeing and approving the resolution plan submitted by the Resolution
Applicant.
(vi) That in the event any of the above statements are found to be untrue or incorrect, then the Resolution
Applicant unconditionally agrees to indemnify and hold harmless the RP and each member of the
CoC against any losses, claims or damages incurred by the RP and / or the members of the CoC on
account of such ineligibility of the Resolution Applicant.
(Deponent)
www.taxguru.in
63
V E R I F I C A T I ON
Verified at ______________ on this _______________ (day, month & year), that the above contents of this
affidavit are true & correct to the best of my knowledge and belief and nothing has been concealed there from.
(Deponent)
www.taxguru.in
1
Annexure-D
SPECIMEN OF
RESOLUTION PLAN
UNDER THE INSOLVENCY AND BANKRUPTCY
CODE, 2016
DATED: ___________________
SUBMITTED BY
[RESOLUTION APPLICANT / CONSORTIUM OF RESOLUTION APPLICANTS]
A [public/ private] limited company under the (Indian) Companies Act, 1956, and existing under the ((Indian) Companies Act, 2013, having its registered office at [ ]
IN THE MATTER OF
CORPORATE INSOLVENCY RESOLUTION PROCESS OF
[Corporate Debtor] CIN - ____________
A [public/ private] limited company incorporated under the (Indian) Companies Act, 1956, and existing
under the ((Indian) Companies Act, 2013, having its registered office at [TBI]
NCLT _____ Bench, Case No: _______
Submitted By: [insert name of authorized signatory] Authorized Signatory [insert email of authorized signatory] [Resolution Applicant]
Submitted To: [Resolution Professional]
www.taxguru.in
2
Table of Contents
I. DEFINITIONS ........................................................................................................................................ 3
II. EXECUTIVE SUMMARY OF THE RESOLUTION PLAN ...................................................................... 4
III. PROFILE OF THE RESOLUTION APPLICANT ................................................................................... 6
IV. OVERVIEW OF THE CORPORATE DEBTOR ..................................................................................... 7
V. KEY CHALLENGES AND TRENDS IN INDUSTRY ............................................................................. 8
VI. SUMMARY PROPOSAL OF THE RESOLUTION APPLICANT ........................................................... 9
VII. DETAILS OF THE PROPOSED RESOLUTION / TRANSACTION STRUCTURE ............................. 12
VIII. BUSINESS PLAN ................................................................................................................................ 13
IX. TERM, IMPLEMENTATION SCHEDULE AND MONITORING OF THE RESOLUTION PLAN.......... 14
X. TREATMENT OF VARIOUS STAKEHOLDERS ................................................................................. 15
XI. MANDATORY CONTENTS OF THE RESOLUTION PLAN ............................................................... 16
XII. SOURCE OF FUNDS .......................................................................................................................... 17
XIII. TERMS OF RESOLUTION PLAN ....................................................................................................... 18
XIV. SCHEDULES ...................................................................................................................................... 19
www.taxguru.in
3
I. DEFINITIONS
As used in the resolution plan, the following capitalized terms shall have the following meanings:
[Definitions of terms used in the resolution plan to be inserted in this section, as applicable]
The words not defined herein shall be as defined under the IBC Code and IBC Regulations.
Abbreviation/ Definition
Full form/ reference
Adjudicating Authority
The bench of the National Company Law Tribunal, [State]
Applicable Laws All applicable laws, regulations, rules, guidelines, circular, re-enactments, revisions, applications and adaptions thereto made from time to time and in force and effect, judgments, decrees, injunctions, writs and orders of any court, arbitrator or governmental agency or authority, court or statutory or other body applicable for such transaction including but not limited to the IBC, CIRP Regulations, Companies Act, 1956 / 2013 (as applicable), and Foreign Exchange Management Act, 1999, each as amended from time to time
CIRP Corporate Insolvency Resolution Process
CIRP Regulations the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, as amended
CoC or COC Committee of Creditors
Effective Date The date on which Resolution Plan is approved by the Adjudicating Authority i.e. NCLT
Governmental Authority
Any nation or government or any province, state or any other political subdivision thereof; any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of India as applicable, or any political subdivision thereof or any other applicable jurisdiction; any court, tribunal or arbitrator or other adjudicatory authority, and any securities exchange or body or authority regulating such securities exchange
IBC or Code Insolvency and Bankruptcy Code, 2016
RA Resolution Applicant
RP Resolution Plan
www.taxguru.in
4
II. EXECUTIVE SUMMARY OF THE RESOLUTION PLAN
[Placeholder for presenting an executive summary of the resolution plan, which may include identified synergies, value addition and other benefits from the proposed resolution plan.]
Illustration: The Resolution Applicant believes that its unique combination of financial strength,
management depth, significant turnaround experience and broad technological expertise would enable
it to successfully implement its Resolution Plan for the Corporate Debtor.
[Summary may include proposed financial proposal, transaction structure, term and implementation
schedule, desired reliefs and concessions, etc.]
In case of a consortium plan: we agree and declare that we being members of the consortium will be
jointly and severally liable for performance of the terms of this resolution plan submitted to the
resolution professional for submitting the resolution plan.
[An indicative format for summary is as below:
S.NO. Particulars Key terms/Amounts
1 Amount of upfront payment to Creditors (Upfront cash recovery)
2 Balance repayment obligation to creditors (other than 1 above)
3 Proposed instruments for repayment
4 Interest rate/coupon and frequency of payment
5 Repayment schedule
6 Security
7 Conversion terms for quasi equity instruments, if any
8 Terms of equity being offered to lenders, if any
9 Amount of fresh equity proposed to be infused for improving operations of the Company
10 Corporate Guarantee or additional collateral/security being offered by the Resolution Applicant
11 Details of key management personnel of the Resolution Applicant with a brief description of experience in the relevant industry/business
12 Details of prior experience of the Resolution Applicant in managing similar business
13 Brief description of successful turnaround case studies in India or abroad
www.taxguru.in
5
14 Credit Rating of the Resolution Applicant
15 Brief of proposed business plan for the Company including the following:
Proposed improvement in capacity utilization
Proposed improvement in sales realization
Proposed improvement in EBITDA margin and absolute EBITDA
Technology adapted
Any synergies with existing business/operations of the Resolution Applicant
Plan for addressing interests of all stakeholders
www.taxguru.in
6
III. PROFILE OF THE RESOLUTION APPLICANT
[Brief profile of the Resolution Applicant (“RA”), including the following illustrative points:
a) Business and background of the RA, its history, geography of operations, financial overview etc.
b) Details of RA’s group companies and corporate structure, composition and shareholding etc.
c) RA’s experience in the relevant industry/ sector
d) Brief overview of the management personnel of the RA
e) Summary of competitive advantages of the RA
f) Business rationale of the proposed resolution plan
g) Any other point, as applicable]
www.taxguru.in
7
IV. OVERVIEW OF THE CORPORATE DEBTOR
[Brief description of the Corporate Debtor, including the following illustrative points:
1. Brief overview of the business and history of the Corporate Debtor
2. Details of the group companies and the corporate structure, shareholding etc.
3. Understanding of reasons for the current financial distress of the Corporate Debtor
4. Any other point as applicable]
www.taxguru.in
8
V. KEY CHALLENGES AND TRENDS IN INDUSTRY
[Brief write up on the trends and challenges of the industry (in which the Corporate Debtor operates or is dependent on) that may have led to the ongoing distress faced by the Corporate Debtor.
Brief rationale of the proposed resolution plan/ transaction structure and how it is expected to resolve the distress faced by the Corporate Debtor.]
www.taxguru.in
9
VI. SUMMARY PROPOSAL OF THE RESOLUTION APPLICANT
[Placeholder for summarizing the financial proposal of the resolution plan]
Illustration: An overview of the amounts proposed to be paid towards the corporate insolvency resolution of the Corporate Debtor pursuant to the implementation of the proposed resolution plan is set out below:
a) Payment towards CIRP costs – [ ]
b) Operational creditors settlement amount – [ ]
c) Upfront cash recovery to financial creditors – [ ]
d) Upfront payment towards outstanding employee dues – [ ]
e) Equity upside to financial creditors – [ ]
f) Fresh capital infusion – [ ]
Details of settlement plan to various creditors:
Sl.
No.
Parameters Amounts Payable
(INR Crore)
Source of Funds Description of Proposal
1 Upfront Cash Recovery for Financial Creditors
[ ] [ ]
[Reference to relevant section wherein details of the payout including timing, breakup / basis of payout to various financial creditors are provided]
2 NPV based on evaluation matrix, as provided in the RFP
[ ] [ ]
[Reference to relevant section wherein details of the deferred payout including timing, quantum are provided]
3 Equity allotment to Financial Creditors
[ ] [ ]
[Reference to relevant section wherein details of the equity allotment, as applicable, are provided]
4 Treatment of other stakeholders (other than Financial Creditors)
www.taxguru.in
10
Sl.
No.
Parameters Amounts Payable
(INR Crore)
Source of Funds Description of Proposal
4(a) Operational creditors, excluding employees and workmen
[ ] [ ]
[Reference to relevant section wherein details of the payout including timing, breakup / basis of payout to various creditors are provided]
4(b) Employees and workmen
[ ] [ ]
[Reference to relevant section wherein details of the payout including timing, breakup / basis of payout to various creditors are provided]
4(c) Other creditors [ ] [ ]
[Reference to relevant section wherein details of the payout including timing, breakup / basis of payout to various creditors are provided]
Details of fresh capital infusion:
Sl.
No.
Parameters Amounts Payable
(INR Crore)
Source of Funds Description of Proposal
1
Upfront fresh capital infusion for improving operations and enhancing revival prospects of the Corporate Debtor
[ ] [ ]
[Reference to relevant section wherein details of fresh capital infusion, including quantum and timing are provided]
www.taxguru.in
11
Other relevant details for the purpose of evaluation, as per the RFP document provided by RP/ COC of the Corporate Debtor:
Sl.
No.
Parameters Description of Proposal
1 Reasonableness of Financial Projections [Reference to relevant sections of the resolution plan]
2 Ability to turnaround distressed companies
[Reference to relevant sections of the resolution plan]
3
Assessment of credibility of applicant and connected persons (to the extent that connected persons are proposed to be participants in the implementation of the Resolution Plan)
[Reference to relevant sections of the resolution plan]
[Relevant inputs providing details / basis of the payout / infusion (including timing, quantum etc.) to various stakeholders to be laid out – as referred in the aforementioned tables]
www.taxguru.in
12
VII. DETAILS OF THE PROPOSED RESOLUTION / TRANSACTION STRUCTURE
[This section should provide details of the proposed resolution plan as per regulation 37, which may
include:
- Proposed settlement/ resolution of debts of the Corporate Debtor
-
- ]
www.taxguru.in
13
VIII. BUSINESS PLAN
[A write up on the business plan including assumptions and financial projections basis which the
financial proposal has been drafted.
The business plan may provide details of proposed management team, fund infusion and its sources
to meet capital expenditure/ working capital requirement, operational and marketing plan, etc.]
www.taxguru.in
14
IX. TERM, IMPLEMENTATION SCHEDULE AND MONITORING OF THE RESOLUTION PLAN
[Steps envisaged for implementation of the proposed resolution plan to be elaborated, along with corresponding timelines (illustration provided below)
a) Step by step approach with timelines for implementing the proposed resolution plan
b) Required approvals and timelines for obtaining the same :
These may include: o RBI approval o SEBI approval o Ministry of Corporate Affairs / RoC approvals o Competition Commission of India approval
c) Infusion of capital, as envisaged in the proposed resolution plan
d) Settlement of creditors, as per details of the financial proposal
e) Other relevant steps and timelines, as applicable
Further, the mechanism for monitoring, reporting, along with provision for associated costs, for the implementation of the resolution plan is required to be elaborated. Commonly proposed mechanisms include formation of a monitoring agency, comprising of members of the CoC, RP, RA etc., with defined roles and responsibilities.]
Illustrative implementation plan:
Step KEY STEPS
1. Approval of the Committee of Creditors and Adjudicating Authority
• The Resolution Plan will have to be approved by the CoC.
• Post receipt of the approval of the CoC, the Resolution Plan will have to be filed with the Adjudicating Authority for its approval.
2. Reconstitution of Board and constitution of Monitoring Committee
Upon approval of plan by Adjudicating Authority, the following actions to be taken:
• Monitoring Committee: [Constitution, roles and responsibilities of members to be elaborated]
• Board: [Reconstitution (if proposed) of Board of Directors of Corporate Debtors to be elaborated]
3. Repayment of priority dues
Within [ ] days from approval of plan by Adjudicating Authority, the following amounts shall be paid:
• [ ]
4. Seeking approvals and implementation of the transaction structure
[ ]
6. Other actions, as applicable
[ ]
www.taxguru.in
15
X. TREATMENT OF VARIOUS STAKEHOLDERS
[A write up on the treatment of various stakeholders, as proposed in the resolution plan. An illustration is provided below, for reference:
Illustration:
The Resolution Applicant has, to the extent possible, taken into account the interests of all Stakeholders of the Corporate Debtor. A synopsis of how the Resolution Applicant proposes to deal with the interest of Stakeholders is stated below.
Insolvency Resolution Process Costs
Insolvency Resolution Process Costs will be paid in priority over payments to all Creditors. The Insolvency Resolution Process Costs, to the extent that it remains outstanding, shall be first duly paid by the Corporate Debtor from its accruals and distributable cash.
[Additional details may be added, as relevant]
Workmen and Employees
The Resolution Applicant is desirous of paying [ ]% of the Workmen and Employees’ Claims.
[Additional details such as retention of employees etc. may be added, as relevant]
Financial Creditors
The Resolution Applicant is proposing to pay the Financial Creditors the amounts stated under Section [ ], which is higher than the recoveries that the Financial Creditors are likely to make in case of liquidation. [Basis of distribution may be elaborated]
Operational Creditors (other than Workmen, Employees)
The Resolution Applicant is proposing to pay the Operational Creditors the amounts stated under Section [ ]. [Basis of distribution may be elaborated]
Shareholders
As a part of the Resolution Plan, the Resolution Applicant is desirous of [proposed treatment of shares may be elaborated]
Other Creditors
The Resolution Applicant is proposing to pay the Other Creditors the amounts stated under Section [ ]. [Basis of distribution may be elaborated]
[Proposal for any other / specific stakeholder, as desired by the RA, may be included]
www.taxguru.in
16
XI. MANDATORY CONTENTS OF THE RESOLUTION PLAN
[References to sections covering the mandatory contents of the resolution plan, as per the provisions of the Code, the CIRP Regulations and the RFP (if any issued by RP/COC) to be provided. Any pending content not covered in the resolution plan elsewhere may be laid out here.
Illustration (as per the provisions of the Code and CIRP regulations amended up to October 5, 2018)
1. The amount due to Operational Creditors – to be given priority in payment over financial creditors (Regulation 38(1)(b))
2. Term of Plan and its implementation schedule (Regulation 38(2)(a))
3. Management and control of the affairs of Corporate Debtor after approval of the Resolution Plan (section 30(2)(c) / Regulation 38(2)(b))
4. Adequate means for supervision of implementation (Regulation 38(2)(c))
5. Compliance with the provisions of law for the time being in force (Section 30(2)(e))
6. Statement as to how the applicant has dealt with interest of all Stakeholders in Resolution Plan (Regulation 38(1A))
7. Disclosure under Regulation 38(3): Certain details of Resolution Applicants
Eligibility declaration by Resolution Applicant under section 29A
Declaration that the plan is not in contravention of the provisions of any applicable laws.]
www.taxguru.in
17
XII. SOURCE OF FUNDS
[The source of funds, as proposed to be settled in the financial proposal to be detailed.]
Illustration:
Description of Source of Funds
Insolvency Resolution Process Costs
[ ]
Workmen and Employee settlement amount
[ ]
Upfront recovery to Financial Creditors and claims being paid to operational creditors
[ ]
www.taxguru.in
18
XIII. TERMS OF RESOLUTION PLAN
[Proposed treatment of any unclaimed / unpaid / pending / contingent / statutory dues may be elaborated including but not limited to the following:
• Treatment of all other liabilities not received / admitted by the RP
• Treatment of contingent liabilities
• Extinguishment and Waiver of other claims and liabilities
• Novation of debt
• Treatment of debts barred by limitation
• Treatment of employees
• Treatment of subsidiaries
• Desired reliefs and concessions
• Treatment of specific contracts
• Treatment of auditors, corporate governance implementation in corporate debtor post acquisition
• Treatment of personal guarantees of existing promoters
• Listing / delisting of shares
• Merger / demerger of corporate debtor
• Change in company secretary/KMPs
• Condition of delays in stock exchange filing /AGM /finalization of audited balance sheet / other compliances
• Completion of formalities for registration of title deeds / lease deeds
• Taking control of assets of Corporate Debtor not in its possession
• Releasing assets owned by operational / other creditors
• Release of amounts / assets / documents held by financial creditors in escrow / Trust
www.taxguru.in
19
XIV. SCHEDULES
[Relevant schedules required as part of the RFP document (if any issued by RP/COC), or referred elsewhere in the resolution plan may be provided.]